In the past, property investors have struggled to adapt to fluctuations in the market. This time they must not panic
As we plough on into February, we can all agree the buy-to-let market is set to remain a hot topic this year.
Indeed, with the tax relief changes, rise in stamp duty for second homes and stricter mortgage affordability checks in place, it comes as no surprise that the Mortgages for Business Property Investor Survey found 60 per cent of landlords predicting they would be affected.
These changes have come as a result of concern about the UK housing market. But landlords must remain resilient. In the past (particularly in 2009), they have struggled to adapt to fluctuations in the market, even going so far as to transfer properties into the names of basic-rate taxpayers to keep themselves safe. But we must not allow ourselves to panic.
Many landlords have begun to increase their rents ahead of the new income tax rules.
According to latest figures, in 2016 the average cost of a new tenancy in the UK private rental sector rose by 3.1 per cent to £913 a month, up from £885 the year before.
Landlords are having to juggle tenants’ concerns about rent prices with a requirement to achieve target yields.
Over time, landlords will continue to grow their portfolios and new ones will inevitably join the market. We should not forget the advantage we have when reinvesting profits to secure further properties, as well as the benefits of a limited company.
The buy-to-let market needs to survive and prosper.
Rob Clifford is group commercial director at MoneyQuest