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2019-2020 Looking Like a BTL Boom Year

Despite all the doom and gloom of the market over the last couple of years, the new tax year is already looking positive. This is surprising as a number of legislative changes and restrictions to previous activities that made the BTL market profitable had put a dent in positivity. Also, Brexit uncertainty, changes to the amount of tax, reduction of certain reliefs have all taken their toll. Many people have left the industry altogether. What has changed?

 

Property Owners Seeking to Increase Portfolio

Investment providers are already reporting an increase in applications. One study suggests that as many as 40% of current BTL property owners are already seeking investment to increase their portfolios. Despite the projected doom and gloom and very real reduction in profitability, it is still expected to deliver healthy profits without hitting rents too hard. In comparison, when surveyed, around 11% of BTL property owners said they intend to offload some stock this year. Uptake is particularly high in the capital, and two major northern cities – Liverpool and Manchester. London has a projected 35% increase in investment with Manchester in second place with 33%. Liverpool was third at 25%.

 

What Types of Property Are BTL Owners Investing In?

Houses were the most popular with two third of respondents reporting seeking investment in houses for families or for conversion to HMOs. The latter type of property represents some of the most profitable and as the featured cities are well-known student areas, a great investment into the student property market too. 54% of respondents said they wanted to buy flats for renting. This is less common in the student market, but there does exist demand from mature students with families needing housing close to their university city.

That’s before we get to new builds with around 40% of landlords seeking investment for BTL in new properties being built across the country. Those specifically looking at the student market are expecting an increase in their investments too, with around a quarter of surveyed participants looking to increase their portfolio. All in all, it’s a good time to enter the BTL market and a good time to invest in your portfolio despite all fears through 2018.

 

But It’s Still a Precarious Situation

While it’s not all doom and gloom, it’s not exactly boom time either. Investors in the market – either new or experienced – need to choose their locations carefully. Presently, the university cities represent a great chance of a return on investment. Choosing the right property for your student BTL property must factor in multiple issues. Properties need to be in the right place relative to the campus or at least have good connections. These are extra considerations that the general population market does not require.