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Kirk Rice Blog

Buy To Let – Why It’s A Great Time To Build Your PortfolioWritten on March 17, 2022 by Kirk Rice LLP

Against a backdrop of rising interest rates, the buy-to-let market remains competitive and accessible, thanks to growth in the number of products available from existing lenders and new disruptive market entrants, keeping pricing teams on their toes. Rates have remained stable since the rate rise, which set against a depreciating stock market due to the conflict in Ukraine, lingering Covid challenges and rising inflation, highlights the stability in brick and mortar investments and their regular, steady yields.

This has been effectively compounded with excellent strides in the property market, with average prices rising 10.2% during 2021. For existing landlords, this untapped equity can be used to accelerate growth plans and reduce existing borrowing rates, allowing greater returns in the portfolio overall. For new market entrants, maximising their borrowing power by finding high yielding assets becomes a real skill, helping dissuade the casual investor and ensuring long term profitable investment.

Adding value to your properties has never been more attractive. Many landlords consider extensions or roof/attic conversions to their properties or adaptation to a house of multiple occupancy (HMO), allowing existing portfolios to become more profitable without new asset purchases. These enhancements can be vital to your portfolio’s longevity and continuing value.

Regional growth remains strong, with the north-east regions of England, Wales, and university towns almost universally seeing more significant rental rises than house price growth. These lucrative areas still ensure that a health ROI is achievable, especially when compared to poor savings rates and an unstable global market.

Finally, we are seeing landlords use limited companies in far greater numbers for succession planning. Having children and grandchildren as directors or minor shareholders of companies that hold properties now can allow efficient planning in later life regarding inheritance tax. You should always seek professional tax advice to assess what options best suit your situation.

It’s never been a better time to review your properties or enter the market for the first time, armed with the right knowledge.

If you would like to speak to our Mortgage Advisor or discuss the structure of your property business with one of our accounting team, please call 01344 875 000 email info@kirkrice.co.uk to arrange a call.

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Please note: answers are given for general guidance only and specific advice should be taken before acting on any of the suggestions made.