Industry News, Property Investment Guidance

Why Property Is Still Worth It In 2024 

With high mortgage interest rates, political uncertainty and general lack of economic growth in the UK all reducing confidence in the UK property market, you may be questioning whether now is the right time to be investing your money into property.  

But what if we told you that despite all the uncertainty, right now is one of the greatest opportunities to build a profitable property portfolio, create a regular passive income, maximise your returns and save some cash while doing it?  

In this article, we are going to reveal why, despite high interest rates and the fear-mongering headlines,  BTL is still a lucrative investment strategy, the hazards to avoid & the investment strategy you need to play by to ensure your investment is a success.   

Why Purchase A Buy-to-Let? 

BTL property in the UK will always be in demand and an asset that is always in demand, is always a good investment.  

Consistent demand  

People invest in BTL’s predominately for the appeal of long term wealth creation but they are also considered the investment of choice because, thanks to the lack of available housing in the UK, they will always be in consistent demand.  

And consistent demand = consistent income.  

It might not be the most exciting property investment strategy out there but there will always be someone wanting to either rent or buy your property and it’s this long-term, broad appeal that’s the key. 

 A Set & Forget Strategy 

BTL properties are simple.  

If you buy the right property and hand it to an efficient management agent, BTL properties are relatively low maintenance and hands-free.  

There will always be some small maintenance issues to fix. However, your management agent will sort these and if you buy a good property, perform a cost-effective refurb, these will more than likely be low-cost, wear and tear issues.   

Long Term Growth  

BTL property is along-term investment strategy and that’s because of its capital growth potential.  

House prices in the UK have doubled in value every 10 years which means as BTL property investors we can be confident that we’ll be able to preserve and grow our wealth over the long term. 

Navigating the Current Market 

The current property market uncertainty presents substantial opportunities for savvy investors. High rental demand, coupled with many landlords exiting the market and high-interest rates making homebuying challenging, has created a buyer’s market. This environment means fewer competitors and more motivated sellers willing to negotiate lower prices. Cities like Leeds and Sheffield stand out, with rising property values and strong rental demand. 

Increased optimism in the market has led to a resurgence of buyers, heightening competition. This surge means the window for negotiating favourable deals on properties is gradually closing. Acting swiftly could make the difference between securing a great deal and missing out on significant savings. 

Potential Challenges – and how to avoid them  

Despite the clear advantages of investing in property, investing in buy to let property in 2024 does have its potential challenges – challenges that have caused many landlords to sell up and get out of the market. In this section, we will show you how, with the right strategy & guidance, you can avoid them.    

Challenge 1: Rising Interest Rates 

There’s no denying that rising interest rates have been a problem for investors in 2024. And with many investors’ fixed rate mortgage deals coming to an end, their profit margins have taken a hit, and they no longer want to continue with their properties. 

Solution – In welcome news, mortgage rates are on their way down from the dizzy heights of 6-7% to 4.5% – 5% (depending on your circumstances). But before you decide to wait until they reduce even further (which may not even happen), here’s what we suggest you do.  

First decide on the minimum monthly cash flow you want to hit before you purchase the property & stick to it. But remember to be realistic.  We are currently modelling our deals at 5% mortgage interest rate which means that our investors are earning around £250 cash flow per month. By modelling our deals at this higher rate, our clients investments will still be sustainable should the rates fluctuate again.  

Challenge 2: Hesitating to Increase Rents 

Some investors have hesitated to raise their rents, hoping to keep their tenants happy and in their properties. But with rising mortgage interest rates, their profit margins have been squeezed and many investors are left out of pocket.  

Solution: Despite the guilt & awkwardness you may be feeling, you have to implement annual rent increases to keep pace with rising expenses, potential mortgage interest rates hikes so that your property remains profitable.  

By working with a management agent, they can implement these annual rent increases with your tenants on your behalf.  

Challenge 3: Section 24  

Tax changes introduced in 2015, commonly known as Section 24, prevents landlords from deducting mortgage interest from their rental income, effectively meaning that you are paying tax on the rent you receive, and not the profit you make.  

Solution: By investing as a limited company, and not in your personal name, these tax changes will not apply to you.

The Opportunity Available To Investors Right Now! 

As mentioned, uncertainty in the market has created opportunities for investors who are ready to move.  

Higher rents – Thanks to landlords leaving the market & creating a shortage of rental properties, partnered with people struggling to buy their own homes, demand for rental properties is at an all-time high. The increase in demand and competition for good quality homes has increased the rents that tenants are willing to pay.  

Buyers market – with people struggling to buy homes, many waiting to see what happens with the next election and the Summer holiday’s fast approaching, there are fewer people in the market buying properties, making it a perfect opportunity for investors to negotiate a discount on the purchase price.  

The Investment Strategy You Need to Play by to Win 

Gone are the days when you can just go out and buy any property and cross your fingers.  

You need to make calculated decisions, stick to a strategy, find investment areas that have strong rental demand and the potential for properties to increase over the long term over the long term, and understand how to navigate the new rules & regulations to build a property portfolio tax efficiently.  

The rules may have changed but if you use the right strategy, you can still win. 

Key Takeaways

  • The current property market offers unique opportunities for investors who are ready to move fast  
  • Buy-to-let properties provide a steady income stream and potential for long-term capital gains. 
  • Property investment can be hands-off with the right management agent in place.  
  • Choosing the right property, in the right area is key to attracting the right tenants, which will allow your property to be a set-and-forget strategy. Addressing challenges like tax changes and rising interest rates can help maximise returns. 

Build Your Property Portfolio Hands-Free 

If you’re ready to start building a BTL property portfolio but are struggling to find the time or don’t have the knowledge to do it yourself, we can help you.  

At Lifestyle Property People, we provide a hands-free BTL investing service for busy professionals like you. 

This is a highly personalised, end-to-end investing service where we take care of everything for you. If this sounds like something that would help you, please fill out this quick online form and arrange a free consultation so we can chat about your investing goals and see if we’re the right fit for you.   



Previous Article