According to research reported by the Residential Landlords Association (RLA) in April 2018, 65% of landlords are optimistic about their property business. This positive outlook is despite rising costs because of commercial mortgage interest rate tax reductions. The reason for a positive outlook is that there is a good tenant demand and high rental yields are achievable.
Landlords are realistic about the challenges they face, but nearly half of them believe that the UK economy will remain strong and Brexit will not have a significant negative effect on their finances.
As well as paying more tax, landlords will have to upgrade properties with low energy efficient ratings. Portfolio landlords worth more than four mortgaged properties are facing stricter affordability tests when applying for new commercial mortgages. Some portfolio landlords are forming limited companies to own their properties as there can be tax advantages in this strategy,
The RLA said that 37% of landlords intend to purchase new buy to let properties in 2018. The North West and South East of England are amongst the most popular regions for investors.
Although there is uncertainty about the buy to let market, landlords are resilient, and property can be a worthwhile investment as long as the right investment strategy is used. Running a buy to let business is more complex than it used to be, but this has not put off many existing and new landlords.
Lenders continue to offer commercial mortgages at competitive interest rates to purchase buy to let property.