How To Invest In Property In UK

If you are considering on becoming a property investor full time, there are many important considerations to make. And, DABORACONWAY property experts can provide you with great advice on local areas, negotiation, and essential guidance. One of your most important factors is the best potential for rental yield. strong rental yields means that the property will pay for itself and more than likely bring you success. 

Britain’s property market has traditionally always been considered a stable and sensible place to invest your money, regardless of whether you are an aspiring landlord or just looking to purchase a home to sell-on in the near future.

However, depending on your intentions and unique situation, there are a number of things to consider in order to get the most out of property investment.

Stamp duty land tax 

Following SDLT changes rolled out in recent years, any existing homeowners who purchase a second or ‘additional’ property – i.e. for buy-to-let purposes – will need to pay an additional three per cent SDLT surcharge upon purchase. If you are intending to invest in property as a buy-to-let landlord, this needs to be taken into account.

The rules governing SDLT can prove costly – and it is important to ensure you can cover these costs, yet continue to make a profit when you come to let out the property. It is equally important to factor in other typical purchase costs such as conveyancing and surveyors’ fees.

An average investor purchasing a £150,000 property will effectively lose £5,000 in SDLT. On top of this, legal fees can cost anywhere between £850 and £1,500.

Buy to let mortages 

Furthermore, changes to mortgage stress tests introduced by the Prudential Regulation Authority also need to be considered – particularly if you are an existing investor who already manages a large portfolio of buy-to-let homes.

Following new rules, mortgage lenders must carefully assess the affordability of landlords before they are able to offer them a mortgage. These changes mean that portfolio landlords need to provide extensive tax and financial information to lenders in order to meet the requirements of so-called ‘stress tests’.

Tax relief for landlords

On top of this, both existing and aspiring landlords also need to be aware of ongoing changes to mortgage interest tax relief.

First introduced in April 2017, these gradual changes will see the tax relief landlords are entitled to claim for finance costs slowly restricted to the basic rate of income tax between now and 2020. Previously, landlords were able to deduct mortgage interest and other allowable costs from their total taxable rental income – but this is unfortunately no longer the case.

Need property investment advice?

Despite the various tax challenges today’s buy-to-let landlords face, property investment remains incredibly popular in the UK and can still be very lucrative if the right advice is sought ahead of time.

Article sourced from Richard Anthony Chartered Accountants. To find out more about Richard Anthony’s specialist services for the property sector, please call 020 8349 0353.

Now might just be the right time to invest in property, discover our article on how the Prime Minister predicts the house price rise for the UK. 

Posted on: 25 March 2019