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5 Reasons Why You Should Invest In The Buy - To - Let Market

18 March 2016



With the stamp duty rise set to take effect next month, it has been said that buy-to-let investors are worried that their market will “dampen”. However as we stated in our previous blog , there is no reason for this to occur. Instead, we suggest 5 reasons why you SHOULD invest in the buy- to - let market & how it is actually one of the most lucrative investment opportunities.

 

  1. 1. High Yields

 

Over the past 18 years, the buy-to-let sector has provided better average returns than any other major asset class. Investors have seen yearly returns as high as 8% depending on which region they have bought a property in and how high the rent is. For instance although some parts of London command the highest rents, the high cost of buying a property in these areas often leaves the yields relatively low.

 

 

2. Capital Appreciation

 

Another benefit of buy-to-let investments is that they often gain value over time. Therefore when it comes to the point of selling the property to the open market, you are likely to gain a high profit. Professional reports have highlighted regional cities as poised for growth in the coming years. Apartments in particular have seen impressive capital appreciation over the last decade. 

 

3. Strong Tenant Demand

 

According to the English Housing Survey, there are 1.4 million more renters today than there were in 2008. With house prices continuously growing & often unaffordable, renting is the only option some people have; especially young adults.

 

4. Low Risk

 

Due to the fact that rent & house prices traditionally rise, buy-to-let investments are generally considered as low risk investments. For instance the price you paid for the property is highly unlikely to depreciate hence resulting in no money lost. As opposed to stocks & shares, you can physically see this type of investment so it is much more tangible.

 

5. Rent Rise

 

As we just stated, rent rises are considered as traditional and recently this has been backed up by hard evidence. The latest October forecast has seen the average UK rent increase by 3.5% in comparison to the same period last year. It increased in 9 out of 12 regions, with the average UK rental value (excluding London) now reaching £749pcm.

 

(Figs from Knight Knox

 


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