When you consider that rent provides a steady income and the fact that house prices are continually rising, it’s easy to see why many people consider buy-to-let properties to be a worthwhile investment. However, there is some debate surrounding whether buy-to-let is still worth it in 2019. When looking at recent figures, it’s possible to determine that despite the change to tax relief and additional stamp duty on second homes, buying to let is still an investment worth making for many.
Should You Be Making a Buy-To-Let Investment in 2019?
According to HomeLet, rent in the UK rose by an average of 1.5% back in November 2018. In December of the same year the average rent agreed was £921 a month, which was considerably higher than the average of £907 seen in December 2017. Along with rent increasing, the average value of properties throughout the UK has also risen. When looking at the UK House Price Index, it’s clear to see that average house prices have increased. This was in spite of an overall downturn in the housing market. In the year leading up to October 2018, average house prices increased by 5.3% to an impressive £213,095. Currently, the average house price stands at £226,234. This is an increase of 0.6% compared to last year.
However, that’s not to say that there aren’t some downsides to making a buy-to-let investment. Back in April 2016, the government introduced a change in stamp duty for property investors. Anyone who is buying a second will now need to pay a 3% surcharge in order to do so, which includes those who buy-to-let. Additionally,buy-to-let tax relief is also changing. The new tax system is slowly being phased in and will be in fully place by 2020, with small changes being made until then. Under the new tax relief system, the amount of mortgage interest payments that a landlord can deduct from rental income will decrease by 25%. This is likely to result in many people who buy-to-let seeing a slight drop in their expected income.
Though recent changes to stamp duty and tax relief could mean that buying to let is not quite as profitable as it once was, it is still a worthwhile investment to make in 2019 for those who have the means to do so.