Changes made to taxation are the biggest risk for buy-to-let investors in the UK, and with new regulation to mortgage relief finance coming into effect in less than three weeks, investors are starting to show their concerns.
Property Wire recently ran a panel discussion on the future of buy-to-let in the UK and saw taxation and how to master changing rules as one of their main topics.
The debate panellists pointed out that buy-to-let is a business. And it should be run like one. During the debate, they encouraged landlords who are in this to make money to make some changes, if necessary.
One of the suggested changes was for London-based landlords to maybe look outside of the capital for their next investment as this would quite possibly improve their yields quite drastically.
Of course, there are benefits of being close to your investment property. You can more easily establish a relationship with your tenant and will be in a better position to keep an eye on your property.
However, for those willing to put those benefits aside, a property away from London, at a lower price could come with plenty of perks. One would pay less stamp duty, achieve higher yields and maybe even benefit from higher capital growth.
Landlords themselves seem to have very different opinions when it comes to where to invest next.
Some say landlords would be right to focus on yields rather than capital growth. Those in favour of yields mostly see tax changes as something that needs to be accepted, as a part of running a business.
Other said they felt like investors are better off putting their money where they already know the details. In times where things are changing, some – especially London-based – landlords said they’d prefer to invest in the city they already know.
So whether you choose to continue investing in the capital and therefore go with the already known and smaller gains or decide to maybe branch out, take your money somewhere else and maybe get back more in return is completely up to you.
The one thing most landlords and investors could agree on during the debate was that buy-to-let should be treated as a business and decisions should be made with your business hat on, regardless of whether that’s in the capital or further up north.