There has been a significant increase in the number of people investing in the buy-to-let sector for the first time over the past year, despite various tax changes, tougher mortgage lending conditions, as well as political and economic uncertainty, according to a new report.
Buy-to-let specialist, Sequre Property Investment, has revealed that new investors entering the market accounted for 61% of their property sales in the 12 months to March 2017, up 15% year-on-year.
Just over a quarter – 26% – of those surveyed said that they chose to invest in the buy-to-let market to generate a secondary income, 23% did so for retirement, 18% wanted to start a property portfolio, while 14% opted to invest for inheritance purposes.
Despite the introduction of the 3% stamp duty surcharge on additional properties, which came into force in April 2016, and the reduction in mortgage interest relief which is being phased in from now until 2020, Sequre Property Investment has reported a 14.8% increase in overall sales over the past 12 months.
Graham Davidson, managing director at Sequre Property Investment, said: “It’s clear that many investors and landlords remain undeterred from investing in property and are buying wisely to mitigate the changes.
“Investors had over a year to prepare for the stamp duty changes and were also given plenty of time to adjust to the revised stance on tax relief, however the level of enquiries we’re receiving are at an all-time-high.
“Low mortgage rates and rising house prices have both resulted in favourable market conditions for landlords. Savvy investors understand that purchasing buy-to-let property which produces strong yield returns from the rental income is crucial, as is choosing the right property type and location.
“A shortage of housing supply in many large cities has continued to keep rental demand high, and these factors are all key attributes of a successful buy to let investment which many novice investors have been keen to take advantage of.”
Graham added: “Buy-to-let property in central locations with high yields and great scope for capital growth results in investors continuing to make a sizable profit even with additional tax payable.”