Buy-to-let property still worth investment, says expert

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Landlord Today editor Marc Da Silva, writing for in September 2016, argued that despite the recent changes that have hit landlords’ finances, buy-to-let investments were still a “safe long-term investment”.

Da Silva looked at the recent government measures that have affected landlords’ finances. These include the 3% rise in stamp duty for buy-to-let properties and the reduction of mortgage tax relief. The government also abolished the automatic 10% wear and tear tax relief on furnished homes.

The Bank of England is expected to have increased powers over the buy-to-let market and new affordability rules could make it more difficult to obtain a commercial mortgage for buy-to-let property purchases.

All these changes could mean that a number of landlords will sell their properties, especially those operating on low profit margins.

Da Silva argues against landlords leaving the buy-to-let market. He says that most rented accommodation makes at least 4% gross rental yield. This return is higher than many other forms of investment, particular bank savings accounts, which offer less than 0.5% gross interest.

Another factor that makes buy-to-let investing worthwhile, says the expert, is the falling cost of commercial mortgage deals for buy-to-let properties. Figures from Mortgage Brain show that rates have fallen by around 8% over the last six months, Da Silva points out.

Da Silva concluded by saying:

“With enticing rental yields achievable and low-cost interest-only mortgages, otherwise deemed too risky for regular homebuyers, still available to landlords, buy-to-let will remain popular.“

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