A recent article on Landlord Today website 1 states “More than a third (34%) of landlords
have recently purchased another buy-to-let (BTL) property or intend to buy one within the
next nine months…”
There are a number of reasons why both experienced and new investors keep coming back
to buy to let. Familiarity and emotion are the two probably biggest drivers. People like to invest in what
they feel they understand. They also like to own investments which make them feel good.
Buy to let investing typically hits both of these sweet spots.
And of course, as any investor will tell you, the population is increasing and yet we have a
finite amount of housing. Again, this lends itself to the idea of ever-increasing rents due to
increasing demand.
Nevertheless, there are still some problems…the first being the taxation of rental income.
For some years now, the government have been trying to take amateur investors out of the
market. They have changed the way that rental income is taxed and they have also
introduced a raft of other measures. For example, it is more expensive to buy and sell with revisions to stamp duty land tax and capital gains tax.
But for me (with my financial adviser hat on – because yes I am also a buy to let investor)
there is something equally serious when we look at buy to let in the wider context of
financial planning and in particular retirement planning.
As well as being taxed more on the income, if you are diverting any spare cash to invest in
property, you may be losing out in a big way on your pension and this may mean that your
retirement options are in fact more limited.
There are a lot of things to consider but I recommend all new or existing landlords to look at
property investing as part of a wider financial plan. Speak to someone you trust to ensure you achieve the means to have the retirement you
want and deserve.
1 https://www.propertyinvestortoday.co.uk/breaking-news/2021/5/landlord-confidence-grows-as-
many-plan-to-buy-new-investments