"It’s clear that many investors and landlords remain undeterred from investing in property and are buying wisely to mitigate the changes"
Sequre, who specialise in sourcing discounted buy to let properties, has revealed that new investors entering the market accounted for an impressive 61% of their property sales from March 2016 to March 2017 - a 15% increase compared to the previous year.
There were four main reasons why new entrants invested in property; for retirement (23%), to generate a secondary income (26%), to start a property portfolio (18%), and to invest for inheritance purposes (14%).
Alex King (aged 47) purchased his first buy to let property to generate a secondary income:
King explains: “I sold my business and wanted to reinvest in something worthwhile and relevant to me. I was primarily looking for city centre apartments which would give a good rental return and represent the best value for money.”
I had considered alternative investments but the returns didn’t even compare to those achieved through property. After a significant amount of due diligence, I purchased two apartments through Sequre near MediaCityUK in Salford Quays, Manchester, which were already tenanted generating yields of 6.67%.”
Despite the highly publicised Stamp Duty Land Tax (SDLT) 3% surcharge on second properties, which came into force in April 2016, and the reduction in tax relief which is being phased in from now until 2020, Sequre Property Investment has reported a 14.8% increase in overall sales (2015 to 2016) and projections so far for 2017 are expected to exceed this.
Graham Davidson, managing director at Sequre Property Investment comments: “It’s clear that many investors and landlords remain undeterred from investing in property and are buying wisely to mitigate the changes. Investors had over a year to prepare for the stamp duty changes and were also given plenty of time to adjust to the revised stance on tax relief, however the level of enquiries we’re receiving are at an all-time-high,” explains Graham.
Low mortgage rates and rising house prices have both resulted in favourable market conditions for landlords. Savvy investors understand that purchasing buy to let property which produces strong yield returns from the rental income is crucial, as is choosing the right property type and location. A shortage of housing supply in many large cities has continued to keep rental demand high, and these factors are all key attributes of a successful buy to let investment which many novice investors have been keen to take advantage of.”
Graham continues: “Buy to let property in central locations with high yields and great scope for capital growth results in investors continuing to make a sizable profit even with additional tax payable.”
