These days, the buy-to-let sector has a constant eye on what the government is doing. Investors have endured a torrid time of late as taxation reforms have made rental properties less profitable.
Even in last week's autumn budget, Hammond announced that capital gains tax reliefs would be restricted from April 2020. The move is expected to cost landlords a combined £150m a year in extra tax by 2023-24. Meanwhile, new property investments attract 3% higher stamp duty, and even allowances for tenant wear-and-tear have been restricted.
But, what goes down must come up, and our experts at Harrisons have identified several opportunities for investors as we look towards 2019.
For instance, competition among mortgage providers, assisted by an ever-low base interest rate of just 0.75%, means that money remains incredibly low cost. Many lenders are launching extraordinary offers to gain the custom of those landlords who remain in the market - cutting rates, easing terms and even offering interest-free periods.
2018 saw an exodus of landlords - those leaving the market reached a three-year peak in April/May, and the exit rate remained high throughout the summer and autumn months. Because there are far fewer entrants, the mortgage market is competing almost entirely over remortgaging products. As a result, there has never been a better time for investors to consider restructuring the finance on their portfolios.
Some banks are also lending higher amounts - like NatWest, who currently allow mortgage repayment amounts that are level with rental income. In other words, you could remortgage for a monthly payment of £2000 on a property whose rental income is £2000, in contrast to the 125% income normally required.
The pace of technology, with startups like Habito using automated processes to speed up mortgage turnaround times, is putting even more power in the hands of landlords who have fewer barriers to refinancing than ever.
Of course, the biggest opportunity is that with fewer landlords in the market meaning fewer properties, combined with rapidly increasing demand from tenants, particularly in London, there is huge upward pressure on rent prices. In other words, landlords can expect their incomes to rise steadily in the short to medium term - just as their assets should appreciate come long-term certainty.
To discuss your individual motives, and maximise your return on investment, please get in touch with one of our experts.