Happy New Year - Considering investing in Buy to Let in 2016? Heres 5 reasons why you should!

Discussion in 'UK Property' started by Ricky Bhurji, Jan 4, 2016.

  1. Ricky Bhurji

    Ricky Bhurji Member Premium Member

    With the new year upon us, many investors will be considering their options whether to invest in a/more buy to let properties - although there are several tax change due in April this year, below are 5 underlying reasons why the medium - long term investor will no doubt be picking up more property this year.

    1) High Yields
    Buy to let properties provide some of the best and reliable yields. Over the last 18 years the buy to let sector as a whole has provided better average returns than any other major asset class.

    Depending on which part of the country you decide to invest in and the type of property you may choose - you can expect yearly returns as high as 8%.

    Where you invest is absolutely crucial - by researching property reports and speaking with local experts who can tip off hotspots - you can find the best returns.

    2) Capital Appreciation
    Another benefit of buy to let investments is that they often gain value over time.
    Regional cities shine as some of the best investment options - especially with the arrival of Crossrail to Reading and the Thames Valley.
    Many reports have highlighted regional cities as poised for growth in the coming years as the London ripple effect continues to play a strong theme.

    Apartments have done particularly well over the last decade. During this period the average UK apartment has seen its value rise by 60%, whereas the average house has only seen 34% growth.

    3) Strong Tenant Demand
    The number of renters has been consistently growing over the last few decades. With house prices becoming more expensive and often unaffordable; tenants are turning to the private rented sector for good accomodation in enviable areas. According to the English Housing Survey, there are 1.4 million more renters today than there were in 2008.

    This figure doesnt look set to slow down either. Currently, 89% of buy to let landlords are optimistic that tenant demand is either going to remain stable or grow over the next 12 months.

    4) Low Risk
    Buy to let investments are generally considered to be relatively low risk thanks to the fact that rents and house prices traditionally rise. To complement this, there is a lot of information available on the housing market, allowing investors to easily stay informed. Plus, many people like the tangibility of bricks and mortar rather than investing in stocks and shares.

    5) Rents are Rising
    National rents have seen steady growth over the past year, reaching a peak of 8.1% growth in July 2015. Rents have been on an upward trajectory for the last decade thanks to the strong demand.

    I'm keen to hear from other Investors about their thoughts on the marketplace:

    A) Will they be investing this year, and if so, where?

    B) What are your property price predictions for the year? Will the market appreciate in double figures again?










     
  2. Nicholas Wallwork

    Nicholas Wallwork Editor-in-Chief Staff Member Premium Member

    Great post thanks @Ricky Bhurji!

    I am investing at the fastest rate possible this year in the UK. As you say demand is massive for rentals in good locations and prices are upwards. I don't think we'll see such a high capital growth this year as the market sentiment is that it can't sustained and with recent and up coming tax changes I think that could keep the growth to an acceptable level. Which is GOOD. We do not want boom and bust cycles, a slow steady growth should be what every long term investor is looking for.
     
  3. Ricky Bhurji

    Ricky Bhurji Member Premium Member

    It seems that so far this year, market activity has started with a bang - investors are rushing to secure new purchases now and get them exchanged before April 1st's stamp duty increases. If any investors are looking are wanting to add to their portfolios, i'd love to help anyone out with advice and sourcing.
     
  4. PropEx

    PropEx Member

    I really don't see 8% yield as particularly high and as far as capital growth goes, since 1975 the average house price has only risen something like 2.5%(inflation adjusted). Also, there will come a time that the rent won't be able to go any higher unless people are getting paid more. I'm not trying to just disagree with you, it is just the way I see it.
     
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