• Is Buy-to-Let Property Investment Worth It in 2021?

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    Having the ability to cover the costs of a mortgage, whilst also profiting through rental income, has long since made buy-to-let property investment an attractive option. But with the COVID-19 pandemic having posed significant challenges to the PRS; the property landscape today, as a result, looks significantly different. So, if you are questioning whether a buy-to-let property investment is worth it within these still somewhat turbulent times; you’re not alone. Interestingly, a recent, large-scale research project has been undertaken, with a view to understanding the changing face of buy-to-let. The study has provided significant insight which should help inform your decision. So how then does the rental market look in 2021?

    Buy-to-let property investment 2021: Is now a good time to invest?

    Whether you are a first-time buyer or are looking to expand your property portfolio; with rent prices on the rise and mortgage rates falling, landlords are becoming increasingly confident in investing. That’s according, at least, to the latest research from Shawbrook Bank. Their new report ‘The Changing Face of Buy-To-Let’, takes a thorough look at exactly what is happening to rental yields across the UK, and how landlords are responding to these changes.

    COVID-19 & government response: Impact on the PRS market

    There’s unlikely to be any disagreement in relation to one of the main findings of the study, which was that the Covid-19 pandemic and subsequent government reactions have undoubtably resulted in a dramatic re-shaping of the PRS market.

    Landlord responses to changes and current attitudes towards buy-to-let property investment

    As the dust begins to settle, however, 67% of landlords are now reportedly feeling positive about prospects in the next year. But responding intelligently to the changes in tenant demands that the pandemic has inevitably brought about; 1 in 10 landlords have now revealed plans to invest in different areas, with 30% of potential investors favouring more rural locations. North-East of England is a particularly popular choice, as cheaper areas have been deemed more likely to enjoy significant growth in property value. With home working/hybrid working looking set to remain the norm for the foreseeable future; the top 5 priorities for landlords looking to invest in a buy-to-let property in order of importance are as follows:

    • Properties with gardens
    • Properties with decent sized living spaces
    • Properties in residential areas
    • Properties with off-street parking
    • Properties with proximity to green space

    The Stamp Duty Holiday: Effects on the property market and the aftermath

    The study also highlighted the ways in which The Stamp Duty Holiday had the effect of ‘turbo-charging’ the property market, with over half of portfolio landlords and more than a quarter of landlords reportedly having bought properties this year as a direct result of the government’s incentive. Transaction levels in the first three months of 2021 were 51% higher than the previous year, and higher than any quarter since 2005.The findings of the study suggested that almost half of landlords wouldn’t have invested, had the savings on offer not been available. Somewhat surprisingly however, the end of the Stamp Duty Holiday hasn’t seemed to have had the commonly anticipated negative effect, as highlighted in the previous sections.

    The benefits of using a letting agent

    To conclude; it certainly seems like buy-to-let property investment is still worth it. But investors must be mindful of the changing needs of tenants and make decisions accordingly. And despite the prospect still being an attractive one; the need to protect your investments has never been greater. Whilst self-management might seem more attractive economically; unless you are prepared to invest a huge amount of your time trawling through government documents (and have enough savings to cover potential fines/upgrades/damages): choosing this path is quite literally like walking through a minefield. Legislative changes are now near-constant. A simple mistake could destroy everything you have tried to achieve.

    Putting your assets in the hands of a professional management company will save you time, money – and ultimately, protect you against a catalogue of potential disasters. And with unemployment increasingly likely as furlough ends; rental voids should be considered one of your greatest concerns.

    An alternative to rent guarantee insurance

    The Choices landlord rent guarantee provides a unique alternative to rent guarantee insurance.

    This exclusive service:

    • Guarantees to pay your rent for up to a year if your tenant doesn’t
    • Covers pandemic-related issues
    • Covers up to £1000+vat of legal costs
    • Goes to court on behalf of the landlord with assistance from a solicitor
    • Saves you the hassle of taking out insurance
    • Is not a loan so won’t affect your credit score

    ARO: The Advanced Rent Option

    The Choices rent guarantee can be taken with The Advanced Rent Option; our first-class property management system that affords you the additional benefit of taking a full years’ rent in advance, in one lump sum, at no extra cost (outside of our standard management fees). So if you are considering a buy-to-let investment; this unique offering is quite simply, ‘the cherry on the cake’.

    Find out more about the full benefits here and calculate what you could get. ARO is available direct through Choices or via our network of partner agents. If you already use an agent and would prefer to stick with them; they might well qualify for an ARO licence. Find out here.


    Here to help you make the right choices

    Choices provide benefits to both landlords and agents that above and beyond the conventional approach. Our customers are our focus; with client satisfaction our primary goal. Feel free to take a look at our propositions for home saleslettings and property investment and decide for yourself!

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