Buy-to-Let – Dead or Alive?

Rupert Smith of Complete RPI discusses the changing situation regarding buy-to-let in the UK property market.

A View

Yes, this is a significant blow. However “bricks and mortar” remain a very tangible asset in which to invest over the medium to long term, say six-to-ten years. Whilst the upfront cost are now significantly increased, take a ten-year view on say a typical property in London and the South East of England worth £450,000.

Take a conservative view on growth rates in the region say 4 per cent year on year over this period and after ten years the property could be worth circa £650,000, assuming a loan to value of 70 per cent that’s a gross return on a deposit of £135,00 at nearly 15 per cent. Yes, of course there are many variables such as servicing the debt, agents fees and maintenance, but the bottom line is rates don’t seem to be increasing any time soon, the rental market is very strong and the UK was targeted to build circa 300,000 homes last year to meet current demand when only achieved circa 160,000. As they say, never invest unless you can afford it but the demand for housing in the UK is ever increasing!

I welcome any comments on this article and I look forward to the next edition please. 

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Written by Rupert Smith

Click here to see the published article.

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