The UK property market remains one of the most profitable investments available but for most people the gradually accruing value of their home is secondary. For developers, ownership is about generating mid-term profit by buying cheap, renovating and selling on at an elevated price.
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But property ownership can offer instant and consistent returns in the thriving rental market. Most of us are familiar with the concept of buy-to-let. Housing market inflation has been out-pacing personal incomes for many years so that getting a foot on the ladder of property ownership is harder than ever. This has inevitably caused expansion in the rental market. If you ask any conveyancing solicitor London is the first place they would point to as evidence of this.
Meanwhile, lenders have been developing ever more complex and bespoke mortgages to service the new breed of landlords. It would seem that buy-to-let is the perfect investment dream. And if you talk to an experienced conveyancing solicitor London will usually be the prime location.
A change in the game
Luxury holidays at home in the UK are growing in popularity, driven by the proliferation of lettings companies who compete with high-end foreign tour operators. The pandemic which drove the UK into lockdown in March 2020 has turbo-charged this evolution, with the result that the ‘staycation’ has become the only option for many people seeking a holiday from the grind of lockdown life. And according to the Financial Times they are prepared to pay premium rates for it: https://on.ft.com/3riqP3b.
Suddenly a buy-to-let is no longer the only option for the clever investment. Buying the right holiday home in the right location can generate revenue at rates that will almost always be higher than in more conventional long-term rentals.
There are initial outlays to budget for, such as the extra 3% stamp duty on holiday home purchases, but beyond that the costs of maintenance and management are not significantly different from the responsibilities of a buy-to-let owner. Nevertheless, it’s well worth getting professional advice. For a capable conveyancing solicitor london doesn’t need to be the focus of the property search. The modern economy means that all parties and agencies involved in a property transaction are remotely and digitally connected.
The financial wins
Whereas long-term buy-to-lets are subject to council tax, HMRC classes ‘furnished holiday lets’ as business assets, which means they are subject to lower business rates. You need to keep them furnished to qualify, and they must be available for 201 days every year, let for at least 105 days and for no more than 31 days in a single letting. If you plan to use the property yourself you are entitled to occupy it for up to 155 days without losing the business tax status. But if you buy a property in one of the most sought-after regions of the UK, you could easily achieve year-round lettings.
The UK is your oyster. Maybe it’s time to plunge in.