Buy-To-Let Remains A Solid Investment Strategy

 

There is never a bad time to reconsider your savings, but with so much uncertainty and turmoil in the economy, it is helpful for people to re-examine their savings strategy.

This is a time when the stock market is extremely volatile, and low interest rates make saving a worthless task for many individuals.

Therefore, if you have a lump sum of money you are looking to invest, it is natural to consider if buy-to-let property is a viable option.

There will always be people who consider “bricks and mortar” to be a solid use of your money. Anyone looking to make a long-term commitment will find investing in property usually pays off, but if you are looking for returns in the short and long-term, the buy-to-let market remains a solid investment strategy.

Demand for rental property remains strong

The demand for rental property is unlikely to drop or diminish in the United Kingdom. While there is a growing range of support mechanisms and schemes for first-time buyers, many households find buying a house to be unaffordable, regardless of the support systems in place.

This ensures there will always be a strong level of demand for rental property. Add in the people who have no desire to own a home, and the people who don’t feel it is worth the aggravation, and you can be confident there is demand for rental property which will not diminish.

For most of 2020, there has been an added incentive for would-be landlords and property investors. The stamp duty holiday has lowered the cost of buying property, even for those buyers purchasing a second home. There is still the stamp duty surcharge to consider, but with the chance to lower the overall cost of property by £15,000; the past six months has seen many landlords and investors snap up property.

BTL lending is on the rise

According to the Financial Conduct Authority, the FCA, lending in the BTL sector has increased this year. There was a rise of 1.2% on the year-on-year figures when reviewing the period between April and June. Gross mortgage lending for BTL stood at 14.4% for this period.

When you consider the UK housing market was shut down for part of this period, and that it fell before the stamp duty holiday, it is likely the second half of 2020 will see further growth in this market.

There has been considerable uncertainty in the property and rental market in 2020, and while there will be fresh challenges in 2020, there will hopefully be more stability. As of the 8th of December, the vaccine for COVID-19 is being rolled, and it is natural for some people to finally feel a sense of optimism as to what will come next.

Regardless of people’s personal opinions on the vaccine, if it moves markets forward, and closer to what resembles “normality”, it will likely be a good thing. Of course, just because things are returning to normal doesn’t mean there will be a massive increase in people looking to buy their first home.

The reality is, the demand for rental property will always be present. Anyone who wishes to capitalise on this demand should seek assistance from experienced professionals.