Is property investment a sound strategy in the UK?

In recent years there has been a huge increase in house purchase for rent purposes. It has become increasingly difficult to afford the mortgage for a first time house owner, thus, making the renting game more lucrative.

Even with the efforts of the government to free up some houses by increasing the stamp duty surcharge, and the fears of Brexit, the buy-to-let market has bounced back from the sudden fall in April.

It was found that rental listings had risen by 6 per cent in the three months to the end of September compared to the same time period last year by Rightmove. “Investor activity has bounced back following the stamp duty changes, though some agents report that many investors are looking to knock sellers down on their asking prices to make up for the additional stamp duty they now need to pay.

New rental supply has held up despite concerns that the stamp duty changes would lead to less fresh stock.” Sam Mitchell, head of lettings at Rightmove.

However, it’s not all sunshine and peaches in the buy-to-let market. Sir Jon Cunliffe, the deputy governor Bank of England in a meeting with a House of Lords committee disclosed that a lot of buy-to-let owners might sell in the event of tax changes or higher interest rates, which would grind down their profit margins. The risk is very real.

All that being said, there’s still money to be gained in the buy-to-let business- with the continuous shortage in both social housing and house buildings. The seaside towns outside of London currently appear to be the best investment for the buy-to-let landlord, and that shows no sign of slowing down anytime soon. Some of the best areas for investment outside London include:

  • Southend-On-Sea, Essex
  • St Leonards-On-Sea, East Sussex
  • Colchester, Essex
  • Lowestoft, Suffolk
  • Corby, Northamptonshire
  • Clacton-On-Sea, Essex
  • Waltham Cross, Hertfordshire
  • Hastings, East Sussex
  • Wellingborough, Northamptonshire
  • Westcliffe-On-Sea, Essex

In London, these are:

  • Woolwich
  • East Croydon
  • Hither Green
  • Barking
  • Orpington
  • Addiscombe
  • South Norwood
  • Greenford
  • Romford
  • Harrow on the Hill

To gain the largest returns, these are the areas you need to invest in and it’s not just about the area, you need to improve your property. Learn to improve your property with AXA’s rental factory.

Buy-to-let is worth investing in, as long as you understand the risks and make intelligent investments, you are more likely to gain a profit.

The fears of the Brexit have waned with the affirmation that the effects are still a long time coming- that is, even if they come at all in the expected capacity. The talks are on-going, and it would not be fully resolved until 2018. There is still time for buy-to-let to thrive.

The buy-to-let market has allowed a lot of middle class people without pension prospects to invest their money in the hope of having something to fall back on upon retirement.

Ensure your future is safe by getting into this market, which has historically seen many people be able to make a significant amount of money despite outside market conditions.

Ben Lobel

Delphine Hintz

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

Related Topics

Leave a comment