We are currently in strange times as buy to let investors. On the one hand we have endless headlines about increasing number of buy to let mortgages at record low interest rates, then on the other hand we see that lending criteria is becoming stricter and stricter for landlords, especially first time investors.
The other big change we have seen is the tapered removal of tax relief on buy to let mortgages for investors who buy in their own name. This change was predicted to drive many investors from the market yet conversely it has seen a huge increase in people purchasing through limited companies and a large growth in mortgage availability for that specific purpose.
So what is going on? Lots of low interest mortgage products are available but are difficult for individuals to qualify for. Disincentives to invest in property as an individual but lots of advantages if you buy as a company.
In our opinion there appears to be a very obvious drive to force individuals out of the market place in favour of larger corporate entities and limited companies. The reason for this is probably that it is far easier for governments to regulate and tax larger corporate bodies plus, they believe, that the corporate landlord will be a “better” landlord by having access to larger resources when dealing with property maintenance and corporate governance requirements. This long term trend will result in massive corporate landlords managed by large corporate agencies. In essence a form of property feudalism with an asset owner class and renter class paying them.
The good news is that it is not there yet! If you have the chance to purchase property then long term you will see fantastic returns. Whether you can qualify for mortgaging, or buy cash and then re-mortgage (which has more flexible terms as a rule), then you can get the assets you need now to earn long term income for the future. With everyone living longer, income will be the necessity for people to live comfortable in retirement. You pay your bills from income and property still provides the best chance to achieve a stable sustainable retirement for the majority of people.
Choices Investments currently has numerous opportunities that yield anywhere up to 11.4%. We have some opportunities which yields 10% net yield for three years. These deals, if purchased with a mortgage, give an annual return on investment of up to 20%. Given interest rates on an average current account are under 0.5% per year it seams a “no brainer” decision to make your money work for you.
If you are interested in how we can help you achieve financial freedom, whether as an individual or with a company structure, please contact us on 01342 840050.