Buy to Let Property – Should I still Invest?

Mildly interesting article in The Telegraph this week. It is not new news for this blog and something we have commented on recently but as always other people’s opinions are interesting.

I’m a buy-to-let landlord; should I still invest?

The consequences of Brexit could make for a silver lining for buy-to-let landlords, who have recently been pummelled by the Chancellor’s tax changes. Yields could rise if house prices fall, and this might also make it easier to obtain mortgages, as the income would cover more of the interest cost.

David Hollingworth, of mortgage broker London and Country, says that “if prices were to plateau that could help them add to their portfolio.” Challis agrees: “Rental demand is expected to stay strong [as more people struggle to obtain mortgages] and may even see an uplift if uncertainty is prolonged. This will create new opportunities for investors.”

What does it mean for the supply crisis?

While we don’t know whether immigration will be curbed, if there are fewer people allowed to work in the UK’s construction industry, it will  exacerbate the already acute skills shortage. About 12 per cent of construction workers across the country are from abroad, and in London that rises to 23 per cent.

Construction costs could jump 12 per cent as a result of the vote to leave, according to Ted Macdougal, development director for Forrest, a housebuilder.

Our housing supply-demand imbalance will not be solved any time soon: the Government’s pledge to build 200,000 homes per year is still way off target. Investment in house building is on hold and until there are enough homes built, the lack of supply could cushion house prices, regardless of Brexit.

BASTION ESTATES COMMENT: It is the supply and demand comment again but the simple summary of saying supply and demand is incredibly accurate. Rental demand will continue to grow and buying your first home will become more challenging. We can’t change this but it does support the benefits of the UK buy to let property industry.

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