Friday News #095 – Young investors using tax cut to muscle in on buy-to-let profits

Friday News 19th February 2021

House prices are up, rental growth continues and borrowing is cheap – there are many reasons why it’s still worth investing in buy-to-let property.

Focusing on affordable areas, investors can build a diverse portfolio where there are strong yields and potential for impressive capital growth.

Here’s what we’ve seen in the news this week:

Is it still worth investing in buy-to-let? Over the past 10 years, investors who purchased a buy-to-let property in southern cities such as London and Oxford have reaped the rewards of considerable house price growth during that period. TD CEO Stuart Williams comments on the latest data in this article. Read more.

Young investors using tax cut to muscle in on buy-to-let profits: Stamp duty cut removes financial roadblock for small landlords reliant on mortgages. The stamp duty holiday has unlocked a new generation of first-time investors who have helped stem the tumbling supply of rental homes. Read more.

Fewer landlords buying with cash: Some 52% of landlords purchased properties with cash in 2020, the lowest figure on record. The share of buy-to-lets bought with cash peaked at 62% in 2017, but the proportion has fallen every year since, research from Hamptons found. The rise in investors using a mortgage was attributed to first-time landlords taking advantage of the stamp duty holiday, as only half (50%) of investor purchases used cash in the second half of 2020. Read more.

Up and Up – rental growth picks up for the sixth month in a row: The rate of rental growth picked up for the sixth month running according to lettings agency Hamptons. Across Great Britain rents rose 4.3 per cent last month, up from 4.1 per cent in December.  Read more.

House prices up 8.5% in 2020 amid tax holiday: UK house prices climbed 8.5% in 2020, the highest annual growth rate since October 2014, according to official figures. The average UK house price reached a record high of £252,000 in December 2020, the Office for National Statistics said. The North West had the highest growth of 11.2%, while London rose just 3.5%. Read more from the BBC.