The buy-to-let sector is constantly changing, with tax and Brexit at the forefront of some investors’ minds, but there’s plenty of value in the market if you know where to look.
In a recent survey by Perrys Chartered Accountants, 75% of people stated they consider buy-to-let investment worthwhile. And 83% of millennials surveyed believe purchasing a buy-to-let is a wise investment, while a third said they’d consider using property investment as a pension.
The results of this survey show many are still seeing the benefits and long-term promise of investing in UK buy-to-lets. Donna McCreadie, a buy-to-let tax specialist at Perrys Chartered Accountants, stated: “Buy-to-let is still a solid long-term investment despite what current market indications and the drop off in purchases might suggest.
“It’s interesting that the younger generation still sees it as a way to plan financially for the future. However, there are many things to consider before jumping in, including stamp duty charges, how income tax might be affected and what the return on the investment is likely to be.”
Tax changes impacting landlords and investors
The survey also revealed the main factors that are putting off investors. Unsurprisingly, the top reason was increased stamp duty and tax rates with 29% being concerned by this. Uncertainty due to Brexit was the second most concerning as 28% of those surveyed were put off by this.
Recently, landlords and investors have seen numerous tax changes, involving stamp duty rates and capital gains tax rules. On top of this, there has been a decrease in tax relief available for individual landlords with changes to Section 24 being rolled out.
There are some tax saving options available depending on your circumstances. For example, using a limited company structure has the potential to provide more favourable tax rates and higher tax relief options.
Overcoming Brexit uncertainty
With uncertainty surrounding Brexit, focusing on investing in areas with strong rental demand and regeneration prospects can help you make higher yields. Additionally, looking at property investment as a long-term investment is typically the best way to see more lucrative returns.
As the long-term projection of the UK property market looks positive, buy-to-let can be a profitable investment if you have the right strategy, plan for the future and don’t only rely on buying and selling for profit.