Is Now the Time to Invest in ‘Buy-to-Let?’

Could now be the ideal time to get started with a buy-to-let investment?

Owning a property that you are able to rent out is an investment concept that many people are interested in getting involved in, and it’s a possibility which could become a reality providing you meet the necessary requirements. Most the time, you’ll be looking at a ‘buy-to-let’ investment, and it can be difficult to know when the best time to invest is.

In this article, we’ll discuss whether its currently a good time to consider a buy-to-let investment, and highlight some of the important considerations that are involved in the process. 

Low deposit mortgage options

What is encouraging for potential buy-to-let investors, is that there is a wide range of mortgage deals available to landlords. The range of deals has also seen the average rates drop for the first time since July 2019, and landlords coming to the end of their two-year fixes may have the option to remortgage their property to a cheaper rate. 

One significant mortgage type that has become an option since the pandemic is low deposit LTV mortgages.  Having almost disappeared for fifteen years, low deposit mortgages have made a resurgence following the covid pandemic, with many wanting to get onto the property ladder. These mortgages can act as a helping hand to those who would not ordinarily be able to buy property. 

For those first timers wanting to invest in buy-to-let properties, low deposit mortgages can make the venture more accessible. 

Are people wanting to invest in property in 2021? 

Buy-to-let property

The first two quarters of 2021 were relatively quiet, which is likely a reflection of the uncertainty as a result of the pandemic and all the restrictions that had been in place. The cuts in stamp duty also resulted in an increase of house prices as many owners and occupiers were trying to secure property during the period and make big savings. Now that the cuts to stamp duty have ended, it’s likely that we’ll see the market slowing down, which could be good news for property investors, and people looking to invest in buy-to-let. 

Following the stagnant periods following on from the pandemic and lockdown, more people are looking to rent property again. With more active renters, this could be the ideal time to invest in buy-to-let if you are looking to becoming a landlord. Of course, there may still be a lot of hesitation following a relatively challenging period for landlords, and the rush to invest may not be quite as widespread. 

However, if you are completely new to investing in property, it’s recommended that you seek professional advice. Although the current signals are good for prospective landlords, nothing is ever certain. It’s highly recommended that would-be landlords seek advice to ensure this is the right time for them to invest in the market. 

Rent prices

The cost of renting varies from area to area, however, there has been a noticeable rise in rent prices over the course of the year. Rent prices grew year on year in June by 8.5% on average in the UK, with some regions seeing year on year rises up to 16%. As prices currently stand, the monthly average cost of rent across the UK is £1092. According to government reports, London has the highest median monthly rent, with prices in 2020 averaging £1,425. The North East had the lowest median monthly rent, with costs averaging £495. 

The comparably high prices of rent can immediately seem lucrative to potential buy-to-let investors, and with the average rent prices being higher than ever, it might seem logical to invest now to try recoup that monthly yield. 

However, higher rent prices usually indicate that property will be more expensive to buy, so if you are looking to invest in buy-to-let, be prepared to pay more now than you would have a few years ago. 

Despite some strong buying signals coming from the property market, there is a lot to consider before making the decision, especially if you are new to being a landlord.

It’s a good idea to seek advice from professionals and ensure you make the best decision for yourself. 

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