Buy-to-let bus tours to Glasgow and Watford are being laid on for middle England, property crowdfunding platforms are popping up faster than you can say “due diligence”, and even twentysomething office hotshots are as familiar with yields as they are with Tinder. The signs are unmistakeable: this is the year to invest in property.
The buy-to-let (BTL) sector is booming, at least in comparison with recent years: according to the Council of Mortgage Lenders, almost 200,000 BTL loans, worth £27.4 bn, were awarded last year — up 32% year on year and the highest since the financial crisis. One in six mortgages are now buy-to-let; in 2009, it was one in 17.
The Bank rate has been stuck at 0.5% for six years, so for many of us, investing in bricks and mortar is starting to look like the only sensible way to save for retirement, school fees or a forever home. “Pension freedom day”, on April 6, when new rules will allow over-55s to do as they please with their retirement pot instead of being forced to buy an annuity, is set to add fuel to the fire. An exclusive YouGov survey for The Sunday Times found that 10% of people currently paying into pension funds say they will invest some of their pension in buy-to-let property.
To help you make one of the biggest financial decisions of your life, Home is launching a three-week guide to property investment. In researching this special, there have been several surprises. For one thing, most experts never buy at auction: time is too tight and costs are too high to do surveys on every interesting lot, only to be outbid on the day. “If a property ends up in an auction, it’s probably difficult to sell — there’s something wrong with it,” says Camilla Dell, founder of Black Brick, a London-based buying agency.
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New-builds, too, are usually not as hassle-free as they’re made out to be. Because of an oversupply of similar properties, you may struggle to let or sell a flat in a large, brand-new development, and could even be forced to cut your price after paying a premium for all that shininess. Buy once it’s at least 10 years old, so prices are established, or stick to low-volume boutique developments. Even better, search for a period home a block away, poised to benefit from the area’s uplift.
You’ll find more tips in our three week guide — and take our quiz to find out what kind of buy-to-let suits you.