Despite a stagnant property market, a new survey has revealed that 75% of people still believe that investing in buy-to-let is worthwhile.
Among millennials the number was even higher with 83% saying they considered it to be a good investment and more than a third of them saying they would use the investment as a pension.
The survey, which was carried out by Perrys Chartered Accountants, also revealed that uncertainty due to Brexit (28%) and increased tax and stamp duty rates (29%) were the main reasons why investors would be put off.
In recent years, landlords have seen an increase in taxes on buy-to-let properties including stamp duty rates and income tax. Meanwhile, buy-to-let mortgages have become more difficult to obtain. Property prices in London – traditionally an indicator for how the market will fare in the rest of the country – have started to dip. Despite this, 76% of Londoners would still consider investing.
Donna McCreadie, who is a buy-to-let tax specialist at Perrys said, “Buy-to-let is still a solid long term investment despite what current market indications and the drop off in purchases might suggest. It’s interesting that the younger generation still sees it as a way to plan financially for the future.
“However, there are many things to consider before jumping in, including stamp duty charges, how income tax might be affected and what the return on the investment is likely to be.
“Investing in a property is a long term plan rather than a quick fix to financial freedom so it’s important to gather as much information as possible and speak to a professional tax specialist and mortgage advisor before making a commitment.”