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Buy to Let: Is Now the Time to Invest?

Buy to Let

For several years now, the United Kingdom has been widely regarded as a haven for buy to let investments. From casual investors with just a single rental property to those with extensive portfolios spanning the British Isles, skyrocketing rent prices have attracted investors from near and far.

The coronavirus crisis and its effects on the UK economy have somewhat diluted the appetites of potential investors. The same can also be said for the major reforms introduced by the government over the past three years, paving the way for a more hostile environment for landlords in the UK.

Though surprisingly, there are those who firmly believe that now could be the perfect time to consider a buy to let investment. Whether you are considering your first buy-to-let venture or looking to expand your existing portfolio, the aftermath of the Covid-19 pandemic could be quite beneficial for some.

Pent Up Demand

For one thing, real estate experts across the UK are expecting a vast wave of pent up demand to be released over the coming weeks and months. Those unable to move due to mandatory lockdown and business closures are now free to put their plans into action, which could see demand for rental properties soar and average rents spike as a result.

It’s also widely predicted that impaired job prospects and economic uncertainty for many will drive up demand for rental properties. It’s likely to be some time before the British public have the financial confidence needed to make major purchase decisions, further increasing demand for rental properties.

All of this is likely to be compounded by the difficulties many will encounter in both raising the funds necessary to qualify for a mortgage and getting their applications approved by major lenders.

Cheap Properties, Low Interest Rates

Most had expected property prices to plummet during the height of the coronavirus crisis, but this turned out not to be the case. Instead, they continued to climb at a slower pace than normal, indicating a potential spike to follow when some semblance of ‘normalcy’ returns over the coming months and years.

This means that for the time being at least, property values are lower than would have been expected at this juncture in 2020. In addition, it is now more or less certain that interest rates (and mortgage rates as a result) will remain extremely low for the next decade at least.

For established landlords and first-time investors alike, this could add up to a golden opportunity.

 

Last Updated: Jul 21, 2020 @ 4:56 pm
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