Buy to Let Outperforming Savings Rates
The savings and investment company Kent Reliance claim that buy-to-let investment is still likely, in the long-term, to beat savings rates by a significant margin over the coming years, despite recent regulatory and taxation changes, new figures suggest.
They have produced fresh data which shows that over the course of a 25-year investment, a basic tax paying landlord, placing a typical 30% deposit of £73,908 on a property, would generate a total profit of £265,500 after all costs and taxes.
Accounting for the impact of inflation over the period, this represents a profit of £162,000 in today’s money, or £6,475 annually.
Although regulatory and taxation changes have altered the market dynamic, reducing its attractiveness to some amateur landlords and increasing the tax bills of higher-rate investors, this data shows that there remain healthy returns to be made in property for committed investors.
However, it is important that buy-to-let landlords adopt a long-term business plan when investing in the sector and undertake business and tax planning. It is vital that investors understand the risks are as well as the rewards.
Although further changes in legislation remain a threat it is essential that the Government does not further undermine the essential role of professional landlords in providing vital housing stock . Without them, the supply of housing in the sector will naturally decrease, leading to higher rents for a growing number of tenants competing for accommodation.
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