Is Buy-to-Let Still Worthwhile?

For many years buy-to-let has been a popular investment option for British people who had money to spare. After all, they would profit over time from the rise in house prices, and they could also rely on a monthly payment from the tenants living in the house. So it seemed like a risk-free way to make money, but then the government changed the tax regime to deter people from buying homes to let.

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This (plus the current housing crisis) has left people wondering if buy-to-let is still a good idea.

How Tax Hikes Affected the Buy-to-Let Market

One of the main things that has affected the buy-to-let market is the recent tax hike from the government. This started with a 3% surcharge stamp duty on buy-to-let properties as well as additional homes. A few months later the government also hacked back full mortgage interest relief, making it much harder for landlords to buy new properties.

So if you were thinking about investing in property, you may now be questioning that decision – but in reality you can still succeed if you approach the situation with your eyes wide open.

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Not All Landlords Are Financially Successful

There are nearly two million landlords in the UK, so buy-to-let is still a very popular way to boost your income. However, it is important to look at the statistics. While around 75% of landlords are making a profit from their homes, around 25% of landlords are breaking even or making a loss.

Yes, this means that the vast majority of landlords are doing well, but could you afford to be the one in four that is potentially losing money? If the answer is no, you should probably avoid trying buy-to-let. But if you have a decent amount of savings, it could be a risk worth taking. The important thing is to arm yourself with as much information as possible before taking the plunge into this potentially risky investment.

If you want to buy to let, consider contacting conveyancing solicitors Guildford such as for help and advice.

After all, the buy-to-let market is constantly changing, so if you want to invest it is important to be knowledgeable about the housing market and the tax laws surrounding buy-to-let properties. This means that you are much more likely to succeed financially.