IQ-Magazine-Issue-16

iQ investment
Surviving the
buy to let crisis
Business advice columnist, Ryan Windsor,
provides an update on investing in buy to let
In just a few months, the bombshells have rained down
on the Private Rental Sector (PRS) thanks to George
Osborn’s Autumn Statement. Too many in the property
investment community have seen these as a direct
attack on landlords.
The main changes that will affect the buy to let (BTL)
sector is the increase on stamp duty land tax (SDLT)
to 3% on second homes/investment properties and the
reduction in mortgage interest relief to 20%.
Mr Osborne said these changes will be implemented
to protect the property industry and the wider economy
from another housing bubble boom and bust, and
to cool down the housing market, but many expert
economists and academics think it could actually do
the opposite.
Those who have been considering
investing in property could now
decide to accelerate their plans
following today’s announcement.
This could mean that it will have
the opposite effect.
Matthew Hall, Head of Tax, Wilkins Kennedy
As an investor I pride myself on my risk mitigating
strategies, and how I limit my exposure, such as always
buying 20% or more below market value. These have
served me well for over nine years and I hope they will
help you too. Below are some tips to help you survive, and
ultimately, thrive in 2016 and beyond.
Seek expert advice
With all the changes that are being introduced, it’s worth
consulting the experts to see how these changes will
affect your situation. I recommend my clients to work
with my team of accountants, solicitors and brokers to
make sure everything is being set up in the most
tax-efficient way to limit their liability.
Stress Test the Investments
There’s no point in making an investment based on the
current situation. I always stress test my investment on a
number of factors such as void periods, rises in interest
rates and changes in the rental income. This way, I can
gauge if the rewards outweigh the risks.
Don’t rush in
If the investment does not hit all your KPIs you should
leave it. Better to be safe and secure with your purchase
than risk losing it all. The property industry follows a
cycle of boom and bust, and there will always be another
opportunity to pick up a great deal with a high ROI.
contact
ryanwindsor89@gmail.com
Be fearful when others
are greedy and greedy
when others are fearful
Warren Buffet
issue 16 | page 41