The short answer to this is no, yes or maybe. For some investors the buy-to-let market has proved very lucrative and successful and will fund a very comfortable retirement and lifestyle. For others it has provided stratospheric wealth well beyond their initial expectations. However, for some unlucky individuals it has been one of the worst experiences of their lives and a costly mistake.
The lettings market at the moment has never been in such a state of flux. Legislation affecting landlords appears to change on a daily basis and adherence to these changes can be critical to their continued prosperity. Falling foul of these sometimes minor technicalities can at the least stop an eviction and at the worst result in a severe financial penalty. There have been significant changes to tax law in regard to the buy-to-let market and in 2019 the tenant fees ban will come into force, which will forbid agents from charging tenants referencing or other fees. We’ll skip over the rights or wrongs of all sides of this particular argument, what will definitely happen over time is that landlord fees will rise, so will rents and numbers of unscrupulous and fraudulent tenants will also rise for the unwary.
Looking forward buy-to-let still looks a good bet for many people. I would suggest that the one buy-to let property as a retirement vehicle may not be the best strategy, although this was always the most fragile investment vehicle as one bad tenant or agent could ruin it. For the professional investor adding to their portfolio then action can be taken to mitigate the changes and business will continue as usual. The investor with plans to build a portfolio from scratch could really seize the moment though.
Many accidental and single or small portfolio landlords are selling and realising the asset, leaving an opportunity to purchase a competitively priced property, in good condition with a tenant in situ. This is a great basis upon which to realise instant capital value and monthly income. There are now a great number of buy-to-let deals available and even an increasing number of buy-to-let mortgages available for limited companies should you wish to take advantage of the tax breaks that a limited company vehicle may offer.
More than ever a good letting agent will prove their worth over the next few years in helping to source and build a profitable portfolio and protect the landlord from making potentially life changing errors. Our letting team are always available to discuss the current market and how we can help and we’re quite willing to spend time with those looking to embark on building a portfolio but just want questions answered. For those questions that we can’t answer then we’ll always be able to point you in the direction of people who can, from accountants to specialist solicitors and wealth advisors.