With the pension freedom reforms being launched this year and the value of rental properties in Britain looking set to smash the £1 trillion mark, it’s easy to understand why a buy-to-let boom is predicted in 2015. With the speed of purchase typically quicker than with second-hand homes and being ready to move into straight away, new build homes are a favourable purchase for many landlords. Consequently, take a look why new builds are at the heart of the predicted 2015 buy-to-let-boom…
In the 2014 Budget the Chancellor of the Exchequer announced from April 2015 savers aged 55 and over will be able to withdraw their entire pension, with the first 25% tax free. The pension freedom reform triggered the surmise that the UK is heading for a buy-to-let boom in 2015, as people use the windfall to generate a rental yield that dwarfs saving rates.
As Dominik Lipnicki of Your Mortgage Decisions said:
“Without a doubt we will see a boost in buy-to-let investment as a result of the pension system changes.”
So what type of property are the over 55s likely to trade their life’s savings for to join the burgeoning British landlord bandwagon?
Whilst location and budget will fundamentally determine an individual’s buy-to-let investment, new build houses, and their many advantages, are likely to be prioritised by many investors.
Let’s take a look why.
Speed of purchase
The speed of which one can purchase a new build could have a direct influence on a soon-to-be landlord’s decision to opt for this type of home. Unlike older properties, new builds have no onward chain and they don’t require a survey. Consequently, investors, such as the over 55s, could draw their lump sum of money and be enjoying a healthy return in rental yield, sooner rather than later. Reaping the benefits of an investment as quickly as possible is, of course, something that all investors aspire to achieve.
Paying less of energy bills is on everyone’s agenda, and none more so than tenants renting property. New build properties are typically fitted with energy-saving features, such as insulation throughout the whole of the home.
It is worth considering that according to the New Homes Building Council (NHBC) and the Zero Carbon hub, those who buy a new build home, built to at least 2013 standards, could save up to £1,400 annually compared to a second-hand home.
For landlords, such savings are favourable, as not only can they promote a home’s energy efficiency and therefore lower gas and electricity bills to potential clients, thus making the property more desirable, but it also means the prospect of a tenant building up hefty bills is minimal.
A professional and convenient design
From young professional workers to students and families, it is safe to say many renters favour professionally-designed homes that offer convenience.
Most new build properties place an emphasis on being professionally-designed, which offer a choice of sizes and styles. The homes are often designed with the latest mod-cons and without any decorating or renovation work to do, tenants can move in quickly and the landlord can start receiving in a rental income straight away.
With minimal maintenance, lower running costs, convenient locations and the fact purchases go through quickly, means that for the discerning landlord, new builds can have great potential and make an extremely attractive investment.
Consequently, new build properties, in all shapes and sizes, are likely to be at the heart of the 2015 buy-to-let boom.
Article Courtesy of New Home Finder