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How lucrative is the Buy To Let Market in 2022?

The Buy To Let market has become much harder to enter over time due to changes in mortgage relief, a surcharge on stamp duty, and rising mortgage interest rates. In fact, the changes to tax laws have left many landlords with a significant decline in their property returns.  

The million-dollar question is, is the Buy To Let market still lucrative? Furthermore, is there an alternative / more profitable way to enter the property market?

The most prominent changes in the B2L market

Firstly, let’s shine some light on the tax changes applied by the government. In 2016, the government announced a 3% stamp duty surcharge on multiple property purchases. This certainly made property investments less lucrative for Buy to Let investors, increasing the incurring cost significantly.

In 2017, the government reduced mortgage interest relief, allowing landlords to deduct mortgage interests for their payable tax amount. This significantly impacted higher taxpayers as they would use property investments to their benefit by getting a 40% tax relief on their mortgage payments.

 Lastly, as inflation hits a four-decade high, banks have increased interest rates to combat the inflation. Hence, getting a mortgage today is 2.5% pricier than last year. This significantly lowers the net yield on a buy-to-let opportunity. 

 

What are the benefits of purchasing a Buy To Let in 2022?

 

Despite the negative occurrences in the property market, the property remains a lucrative way to grow your savings. Here are the benefits of Buy-To-Let opportunities in 2022:

  • Property is a low-risk investment as property tends to hold its value even when the market is volatile. Property prices have continued to increase even during the pandemic. So it’s safe to say you might experience capital appreciation. However, it’s also important to acknowledge that capital appreciation isn’t guaranteed. You might have to hold a property long-term to see capital appreciation.
  • As properties become more expensive, rents increase as well. Rent in the UK has been increasing yearly, having increased 11% last year. With the right strategy, you could benefit from this significantly.
  • You can take out insurance to protect your rental income and avoid damage and legal costs. This reduces the risk of your property investment. 

 

Is there an alternative way to enter the UK Buy To Let market?

 

Though traditional property investments have pros, house prices across the UK have become out of reach for a large population. Furthermore, many people don’t have the time, energy, or experience to enter the property market. On top of that, the average rental yields on property investments within the UK are 3.6%. 

Concept Capital Group offers an alternative buy-to-let opportunity that starts at only £40,499 and offers yields of up to 11.1% per annum. The opportunity is not only more affordable but it comes fully managed and tenanted for the entire 12 years. 

The best feature of our Buy To Let opportunity is that it’s designed to house low-income government-assisted tenants and individuals. Each home purchased by our clients is built to the BS3632 standards and placed on a site with high demand for affordable housing in the UK. 

Book a call with one of our consultants to learn more about the exclusive Buy To Let opportunity.