Short Answer: Yes! (In The Long Run)
It is always surprising to hear someone ask the question “Is buy-to-let UK still relevant?” because in many ways investing in real estate has never been more relevant for those who have the funds. The truth is that the population of the UK is growing at an alarming rate and the housing crisis has only just begun. As the years go on, the value of land and housing is only set to increase, and monthly rent payments are certain to increase.
When house prices rise so much that many people can’t even afford a deposit, competition in the rental market is going to increase and landlords will basically be able to set their own prices. This is good news for buy-to-let property owners who are in it for the long game.
Of course, in the short term, many people, when asked “Is buy-to-let UK still relevant?” might say “No”. This is not surprising as in the short term, buy-to-let owners can lose a lot of money. For example, if a tenant defaults on rent payments, it costs a lot of time and money to deal with them. In addition, many tenants can cause damage to an investment property that requires the owner to carry out expensive repairs in order to avoid being sued. Many local authorities place strict guidelines on landlords renting to housing benefit clients, which often mean property owners have to pay premium prices to contractors to have repair work carried out of hours or risk large fines.
One area in which buy-to-let investors can make a lot of money relatively risk-free is the student accommodation marketplace. Student numbers are increasing year on year and those attending university are always going to need a place to stay. One of the good things about renting to students is you can receive five or more sets of rent from a single house if you rent rooms out on an individual basis. In addition, students always have money to cover their rent due to government maintenance student loans.
While most would say it’s a good idea to start getting involved with the buy-to-let real estate market, it’s important to remain cautious when it comes to using loans and mortgages to fund your investments. Brexit is on the horizon and no one knows what could happen to interest rates, the value of the pound sterling and the UK property market over the course of the next five years. Proceed with caution and don’t over leverage yourself.