insideKENT Magazine Issue 97 - April 2020 | Page 132

PROPERTY
PROPERTY INVESTMENT
BRICKS AND MORTAR HAS ALWAYS PROVED TO BE A GOOD INVESTMENT FOR
SAVVY SAVERS. BUT AFTER RECENT YEARS OF CHANGING TAX POLICIES, STAMP
DUTY SURCHARGE, SLOWING HOUSE PRICES AND INCREASED LEGISLATION, IS IT
STILL A GOOD INVESTMENT?
In short, the answer is yes. Despite the buy-to-let
market slowing over recent years, there is still a lot
of potential left. Especially when you consider that
4.6 million households in England rent from private
landlords, there is a lack of social housing, first time
buyers are facing increasing difficulties in buying
their first home, the UK population is growing, more
people than ever enjoy the flexibility of renting rather
than buying, and current house building isn’t keeping
up with demand – leaving a big opportunity for buy-
to-let investors. As Chris Baguley, commercial
director at buy-to-let lender Together, explains “The
boom days may be over, but there is still life in the
buy-to-let market.”
Property in 2020 and beyond
For January 2020, data from the HomeLet Rental
index showed that the average rental price for a new
tenancy in the UK was £923 per calendar month,
up by 2.35% on last year. This is a promising sign
of recovery and growth and, as Alpha Bhakta, CEO
of Butterfield Mortgages Limited, explains “Whilst
claiming a Boris Bounce may be going too far, there
is a sense that 2020 will be smoother sailing for the
property sector; Savills has predicted that the prime
central London market could be set to grow by as
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much as 3% in the coming year. Indeed, such growth
can be attributed to investor demand.”
Investing in property in Kent
Although the North West is the UK’s current
property hotspot, with house price growth predictions
of 21.6% over the next five years, our vibrant county
of Kent is still a good area for property investment.
With excellent commuter links, good schools and
regeneration projects, Kent offers endless
opportunities. Level of demand is steady and
properties in Kent offer good rental yields and
potential for capital growth. As Wards of Kent
explains, “It’s not what you buy, but where you buy
and we advise staying local. You instinctively know
the market better than you think and your local
knowledge of the areas will prove invaluable when
it comes to knowing the good places and the less-
desirable ones.”
Areas to watch in Kent
Kent, particularly the Kentish coastline, is proving
to be very popular amongst ex-Londoners. It offers
living outside of the city, with property prices a
fraction of London values, yet with the ease of a
short commute. As highlighted in the Kent Property
Market Report 2019, there is major housing
planned for Ebbsfleet, Ashford and the Otterpool
Development near Hythe, which offers up
opportunity for property investors. Similarly, towns
like Whitstable, Margate, Ramsgate and Broadstairs,
have experienced a surge in popularity over recent
years due to regeneration and a host of affordable
buy-to-let properties available.
Buy-to-let, peer-to-peer, or flipping
Traditionally, property investment for buy-to-let
involves purchasing a property with a buy-to-let
mortgage. You then rent the property out
accumulating both rental income and capital growth
for when you eventually go on to sell the property.
However, for many private investors buy-to-let has
lost its shine financially, with landlords no longer
able to offset their mortgage interest costs against
rental income and the 3% stamp duty surcharge on
new purchases, eating into profits.
But there are other options to still invest in the
property market.