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Do Static or Falling House Prices Mean Buy to Let is a Bad Idea?

Do Static or Falling House Prices Mean Buy to Let is a Bad Idea?

All the signs are suggesting a drop in house prices is likely, as well as a possible slowdown in the economy, but does this mean that rents will fall? Does it mean people will stop renting? Is it still a good time to consider Buy-to-Let?

Whatever the rumour mill churns out, a downturn in the housing market always provides opportunities. A few examples:

The exodus of landlords from the private rented market is rapidly turning into a crisis as the government’s ‘failed’ policies wreak havoc, it has been claimed.

If the supply of properties to rent decreases, the net effect will be an increase in rents as an ever-increasing supply of tenants chase a diminishing supply of properties.

Some landlords are selling their properties because their portfolios have become unprofitable due to the tax changes.

This will give investors, who structure their portfolios more tax efficiently, more choice of quality houses to add to their portfolios.

It’s all conjecture, but there may be a drop in house prices.

Buy to Let is a medium to long term strategy. If you’re not intending to sell, a drop in house prices is irrelevant. A dip in prices is another good opportunity for new investors to build their portfolios.

The one constant in the Private Rented Sector is the consistent demand for property to rent. More and more people are looking for good quality rental property where they can make a long-term home for themselves or until they have saved enough for the deposit on their first property. I’d argue that our approach to renting is becoming much more like the approach of continental Europe, where renting is the norm.

Whatever the outcome of Brexit, nothing significant will happen to the Private Rented Sector. It goes from strength to strength and buy to let investment is now an integral part of the housing market and it is here to stay.

 If you’ve been considering investing in buy to let property, now might be the time for a chat about the options. I’ve been acquiring and managing high quality buy to let portfolios for my clients for over 20 years so have learned a thing or two about what works and what doesn’t. You can call me on 07730 797406 or email me at ian@aspireletting.co.uk.