There’s just something about property.
Even beyond buying your own home, a major milestone for many, owning bricks and mortar to make more of your money can be extremely fulfilling. Buying a place to rent out could give you a potential new source of income now, as well as being a long-term investment for the future.
It can also fit nicely with so many situations in life. You might be approaching retirement and looking for an alternative to investing through a pension, buying a property for your child to live in one day or have as an asset in their name, or looking for ways to diversify your investment portfolio.
Some people buy a property for themselves that they don’t need just yet – perhaps in the place they plan to move to when they retire or start a family. Others simply want do it to as a way to generate an income – simple as that.
Whatever the reason, there’s a permanency about property that can draw people to it. Obviously, there are risks – house prices can fall and there are usually mortgage payments to meet whatever happens. Also, you may struggle to find tenants, there are maintenance costs to cover and stamp duty to pay (although the government recently announced a temporary holiday on stamp duty on the first £500,000 of property sales across England and Northern Ireland). If you’re interested, then it’s definitely worth talking to an expert to see how it could complement your broader financial planning, and to discuss the other options available.
But with that all in mind, many are still pulled to property quite simply because it’s real. You can touch it. And that matters.
Potential deals as house prices could fall this year
If you have the urge to buy-to-let, the government’s stamp duty holiday, which runs until the end of next March, could make this a good time to act. It could save buyers up to £15,000, based on current stamp duty charges.
Coutts property expert Katherine O’Shea says it’s therefore “a strong incentive” for anyone thinking of buying somewhere to rent out.
She adds: “The government’s 3% stamp duty surcharge on buy-to-let properties still applies, but the recent changes certainly provide a window of opportunity to those who had been considering expanding their property portfolio.”