With pension reforms on the horizon,changes to Stamp Duty Land Tax already in place and tenant demand on the increase, buy-to-let is fast becoming an investment choice for people in the UK.
Research from the Bank of Ireland UK has revealed that almost four in 10 (39%) of British homeowners want to become buy-to-let landlords at some point in the future and that 41% of people approaching retirement or already retired intend to take a lump sum from their pension to buy a property or pay off their mortgage.
Increases in average house prices and a rise in the number of appealing mortgage products on offer also makes becoming a landlord a very attractive prospect, butSteve Bolton, Founder and Chairman of Platinum Property Partners, warns that making a good return from buy-to-let is not as easy as people assume.
“It’s no wonder that more people are looking to get into buy-to-let as a means of securing their retirement income, supplementing their existing salary or building a nest egg for their children. But while investing in buy-to-let property is an excellent way of generating long-term returns rarely achieved by other asset classes, potential and existing landlords should not enter the market with their eyes shut,” he said.
His view is supported by the findings of this research, which also showed how as many as 50% of existing landlords said they did not fully understand the income tax implications involved in having buy-to-let properties.
Steve added: “There is a worrying lack of planning and financial understanding among landlords, as our own research last year revealed. So, for those people intending on investing in buy-to-let, it’s essential that they carry out thorough research into the property they want to buy, where they want to buy, the type of tenant they would attract and the income it would generate. Only then will they be in a position to evaluate whether they will in fact benefit from Stamp Duty changes, rising tenant demand and pension reform.”
