How To Buy To Let In The Uk : Investing In Rental Properties

The universe of buy-to-let is one that many of us dream about. But the reality is that being a landlord can be challenging and time-consuming. Buy-to-let property investment is continuously evolving and is one of the most popular investment choices among both experienced and new property investors. This is due to the remarkable performance of buy-to-let properties in the UK since early 2010. This offers investors the chance to explore opportunities in both property and rental values, whilst paying out strong yields each month. 

Read on to learn more about investing in buy-to-let in the UK.

The UK’s buy-to-let sector is an important driver of investment into bricks and mortar. This sector of the property market has been continuously thriving as the demand for tenants continues to climb, bringing more opportunities to investors looking for a medium to long-term investment. The number of landlords in the UK now sits above approx 2.65 million people and with demand for rental properties continuing to rise, a sector is still growing. But what is buy-to-let property? 

Buy-To-Let in Words

A buy-to-let (BTL) property is a residential property purposely bought to be rented out. Most of these properties will require a buy-to-let mortgage – a mortgage specifically designed for the purchasing of a property to let.

Not all properties are at first bought as a buy-to-let. Some landlords inherit property or buy a property to live in, but later decide to rent it out. In this case, the landlord must make their mortgage lender aware of it– and switch their mortgage to a buy-to-let.

Why Invest In Buy-To-Let Properties

There are myriad reasons why buy-to-let properties are the right route to market for many investors, we have outlined some of the most common reasons below:

Capital Growth

Considering the various investment classes available to investors in the UK, such as residential, commercial, hotels, student accommodation, and healthcare, residential buy-to-lets are still by far the most attractive. According to one study, it has been predicted that Manchester will increase by 17.1% on average in terms of property values from 2020 to 2025. This is simply not seen in other sectors.

This natural boost in property value can deliver huge profits for investors when they’re ready to sell.

Rental Income

If prices are suitable, the rental income from a buy-to-let property should cover all mortgage payments, ground rent, and other costs that still deliver a profit for the owner.

Fully Managed

Property management firms can handle all the aspects of the property managing the property on the investor’s behalf, such as finding tenants, organizing refurbishments, collecting finance, and general maintenance.

Leverage Funding

It is a common misunderstanding that having no debt is the ideal scenario. Having debt that is calculated and managed wisely allows people to invest in additional properties they would not otherwise be able to and provide a higher return on their cash.

By smartly utilizing funding, particularly in combination with low-interest rates, investors can potentially purchase more properties and benefit from the multiple in capital growth. As equity builds, investors then have the option to grow their portfolio more aggressively.

High Demand

The UK has had a fundamental undersupply of property for years. Developers cannot build properties fast enough and typically all well-built property sells, mostly in advance of completion during the construction period. The government has set a target of thousands of new homes to be built per year over the coming period.

Final Words

We hear this question a lot; How much deposit do I need to get started or grow my portfolio?

It depends upon your budget, free time, the level of service you want, and the amount of control you want. Contact the Finspace group and connect with our expert when you need it.