If you remember the buy-to-let market of old, then you’ll know that it was once a sure-fire way of generating rental income and building property wealth.
In the past, demand for buy-to-let mortgages was incredibly high and getting a buy-to-let mortgage was a relatively straightforward task for those looking to build a property portfolio.
As a Maidenhead mortgage broker that’s been in business since the mid-2000s, we rode the wave of buy-to-let mortgage applications and, we’re pleased to say, secured buy-to-let mortgages for thousands of people across the UK.
Things changed when George Osborne, former Chancellor of the Exchequer, made owning a buy-to-let property less tax-efficient – unless you owned it outright, which not many people did. Then a combination of tax complications, dips in property prices and increasing mortgage rates over recent years muddied the water even further.
However, things are changing. Here are three reasons why.
- On the up
Despite a dip in property prices, which, based on historical UK property prices, is likely to be seen as a blip, they are back on the rise – with predictions pointing towards continued growth. As a result, capital growth is likely to appeal to those looking to become a landlord for the first time and seasoned landlords looking to continue building their portfolio.
- Going down
As they say, what goes up must come down. And finally, after almost two years of fluctuating rates – sometimes daily – mortgage rates are finally coming down. Those thinking of applying for a buy-to-let mortgage would likely have given pause for thought since the infamous mini-budget of 2022. Now, as things begin to settle, we may start seeing some of the best buy-to-let mortgage rates in the UK appear once again.
- Capital gains tax
Another advantage to getting a buy-to-let property is that capital gains tax on residential property was cut from 28 per cent to 24 per cent for higher and additional rate taxpayers earlier this year, which makes selling a buy-to-let property less expensive (and more profitable).
In focus: buy-to-let
- More than 83,000 buy-to-let mortgages were approved by UK lenders in 2023
- Buy-to-let mortgages were worth £24.4bn in 2023, which is around 50 per cent more than the total market value from 2012, when it stood at £16.2bn
- Buy-to-let mortgage values rose in 2012 from £16.2bn to £41.1bn in 2022, and it’s expected that 2024 will see this figure increase to £38.4m
- It is thought that buy-to-let mortgages will be worth more than £46bn in 2032
Source: Uswitch
Looking ahead
Based on the Uswitch data, what our team of Berkshire mortgage brokers are experiencing and the level of enquiries we’re fielding on buy-to-let mortgages, we believe that the buy-to-let mortgage market is bouncing back.
But applying for a buy-to-let mortgage still needs to be handled with care by a buy-to-let mortgage broker that understands the market, can help you navigate it and, of course, that has access to the best buy-to-let mortgage deals in the UK.
We certainly hit that brief. As the market begins to stabilise – and if you’re an existing landlord or prospective landlord – now is the time to speak with a buy-to-let mortgage broker.
For the best UK buy-to-let mortgage deals, contact our team of Maidenhead mortgage advisers on 01628 560820 or by emailing enquiries@altonmortgages.co.uk.