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Buy-to-let market in general
The number of buy-to-let investors in the United Kingdom has risen to a record high of around 2.5 million in the latest tax year. The increase of 4.8% on the previous year still comes despite the introduction of numerous extra taxes and regulations on this sector alone. Over the last few years, the government has introduced a new 3% Stamp Duty levy, new stress tests for home loans and ended mortgage interest tax relief. Despite the hurdles, a chief at RUUT Homes confirms “The buy-to-let market is increasing year on year where the demand is increasing year on year”.
Finding the right option for you
There are two options when it comes to a buy-to-let property. There is a cash option, when you want to pay for the property outright. The advantages of the cash option are that buying it outright with cash will ensure that the sale of the property will be processed much quicker than the average property. And if a void period is in rent has occurred for any unforeseen circumstances then you won’t need to worry about repayments and interest. This will enable you to have financial freedom. Furthermore, by taking the cash option, you will be offered a discounted rate.
The second option when it comes to a buy-to-let property is the mortgage option. Again, this has its advantages. One of them is that is that buying with a mortgage will often get you more for your money if utilised well. When buying with the mortgage option, you need to consider whether you are looking to purchase multiple properties and whether you can pay a multiple mortgage repayment in the event of a rent void period.
The best place to buy your property
When it comes to investing in a property, there are three main things which matter the most – Location, location, location. This is something we agree with.
There are two types of areas in any given city. The first one being emerging areas in the city; these are areas with a low purchase value. Here you will often get a better yield for your investment because purchase prices are lower than average. One thing to be wary of here is to ensure, you don’t buy in a saturated area which may have multiple properties up for rentals. Examples of these types of areas across Leicester would be, Braunstone, Beaumont Leys and many more.
The second type of areas in a city would be already well-established areas. These are areas with a premium purchase value. These will usually offer safer returns with rare void periods. However, the down side here is; lower yields in comparison to type one areas because property values will usually be at a premium price. Examples of these types of areas in Leicester would include, Hamilton, Belgrave and many more.
Promoted by Reece Ladwa