11th January 2020
Brexit. It’s enough to strike fear into all but the bravest buy to let investor. An estimated 17% of investors have been reported as ‘putting investments on hold’ until the fate of Britain’s departure from the EU is decided. But are they wrong in doing that? A recent report suggests that they are.
What’s happening right now
No-one knows what the future holds post-Brexit. Because of this, many people are putting plans on hold, waiting to see what happens after a deal has been struck… or not. We don’t know what will happen with lenders, whether mortgages will be affected, taxes, legislations and changes to laws and regulations. There’s a lot to worry about.
It’s all down to whether or not we get a no-deal Brexit. Because the prediction is that in that case, we will see a sudden dip in the market. But on the flip side, if a deal is agreed to, we could very well see the market pick up quite rapidly. And it’s this key point that we should, perhaps, be more focussed on.
In fact, landlords might find that the current climate is the ideal opportunity to invest, as there is much less competition, and if you know where to look, there are great deals to be had. Taking advantage of current low prices in the right areas could very well mean that return on investment is higher for those who are prepared to take the risk.
Another thing to consider is that there is a great demand for rental properties, as people are put off from buying homes at this time, and are more likely to rent long-term instead. That is partly down to them feeling that renting a property holds less risk than taking out a mortgage. There is no shortage of tenants looking for homes, so the chances of having empty properties are much slimmer than in the past.
Seizing the opportunity
A survey recently completed by Censuswide reveals that most respondents believe that the buy to let market will recover, and become stronger over the next 3 to 5 years. If that’s the case, then surely right now is the perfect time to be taking advantage of the current market, seizing opportunities to purchase property to let out, and holding on to those properties while the market recovers.
Waiting until the UK leaves the European Union could mean that those same buy to let properties see a rapid increase in price, meaning that investors get much less for their money, and a lower return on investment.
Estate agents also believe that following Brexit, there will be a flurry of activity in the housing market, which means that there will be less opportunity to grab the best deals.
A stronger portfolio
Of course, if landlords are in a position to invest in buy to let properties now, it also has the advantage of increasing existing portfolios, and therefore increasing business growth. Having a larger number of properties means that while you are waiting for the market to stabilise, you still have money coming in from your tenants.