Location, Location, Location star Phil Spencer says it’s time for agents to go for the ‘hard sell’ on Buy To Let, reminding prospective investors that it’s still a worthwhile option.
Spencer – in his latest monthly column for our sister publication, Estate Agent Today – chronicles the various tax and regulation changes of recent years which have led many to question the financial viability of buy to let. He also disputes those campaigners and activists who have tried to paint buy to let landlords negatively.
He says in his column: “We know that almost all of those perceptions are unfair, and that the private sector provides valuable and typically good quality housing to tenants wanting the flexibility of renting. And we know that buying the right property in the right place, with a target tenant in mind, can still be financially rewarding despite a growing tax burden and more regulations.”
Spencer suggests there are five arguments that agents can wage to demonstrate that there is still life in buy to let.
Firstly, capital returns are good but of course not guaranteed. New figures from he Halifax show that at average UK house prices grew by 20.4 per cent between January 2020 and December 2022, up by £48,620 from £237,895 to £286,515.
“We doubt that same level of growth will be seen in the next three years but long term capital appreciation has been consistently good for bricks and mortar” he notes.
Secondly, rental returns have been strong especially in high yield areas. Lettings agency Hamptons estimates that an average property bought in 2017 would have generated £96,000 in rental income over the past six years.
Thirdly, there seems little prospect of rental demand slowing significantly, as housebuilding levels are low, especially for affordable housing.
Fourthly, would-be investors still have the option of owning buy to lets through a company to minimise their tax and overheads.
And finally landlords can genuinely feel they are contributing by providing a home “and it’s not the landlord-tenant battleground some people claim it to be.”
You can read his full column here.
