Should You Buy or Sell UK Buy-to-Let Property in 2024?

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Does the UK Property Market Provide Enough Opportunities to Investors in 2024?

In UK property investment, the decision to buy or sell buy-to-let properties in 2024 is fraught with considerations. Recent tax changes, including the shift to standard rate tax on rental income and reductions in Capital Gains Tax allowances, have reshaped the investment landscape.

Additionally, fluctuating base rates and market conditions pose challenges for landlords considering remortgaging or selling.

Yet, amidst these challenges, buy-to-let opportunities persist, especially in areas offering high rental yields and potential for capital growth.

This article explores the complexities and opportunities facing buy-to-let investors in 2024.

Should you buy or sell property in 2024? Read on for more information.

Discover More: If you want to know more about property investment, check out our guides on off-plan properties and how to invest in property in the UK.

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What Challenges Face Buy-to-Let Investors in 2024?

In recent years, buy-to-let landlords have faced a tax change: they now pay standard rate tax on rental income, irrespective of mortgage costs, unlike before when tax was applied only to profits.

Additionally, in April 2024, the Capital Gains Tax allowance decreased further to £3,000, down from £6,000 in April 2023, as per the Autumn Statement 2022. This tax applies to property sale profits not used as primary residences, due within 60 days of completion.

Many landlords are contemplating the future, particularly regarding remortgaging. With fluctuating base rates, they risk higher monthly mortgage payments and may consider selling before that happens.

Nevertheless, property historically appreciates over time. In 1980, the average house sale value was £19,773. By 2024, it surpassed £280,000 (per HM Land Registry). Such returns would please any investor, regardless of the most recent tax changes and elevated mortgage repayments.

While past performance doesn’t guarantee future results, the property market has shown long-term resilience, which might alleviate concerns.

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Is Buy-to-Let Investment Profitable in 2024?

Some property investors notice the market isn’t as profitable as before.

Mortgage interest relief has ceased, causing a substantial drop in profits for many landlords, especially those in higher tax brackets. Tax benefits have now been halved without the previous 40% tax relief on mortgage payments. These alterations pose significant challenges, especially for landlords with higher tax rates.

However, if done correctly, buy-to-let can still be highly profitable.

Firstly, you need to invest in properties in areas with reasonable value property prices and high rental yields. As such, cast your eye over published and up-to-date data. Zoopla keeps an updated table of the top places for rental yields. That data shows that northern cities provide the most robust yields in the UK, with Sunderland, Liverpool and Burnley all showing average yields over 7%.

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Off-Plan vs Completed Property

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Should You Invest in Buy-to-Let Property in 2024?

The UK buy-to-let market has faced a strange couple of years. High inflation and interest rates have made properties more unaffordable. However, activity has recently increased, with inflation coming down and mortgage rates following suit. In addition, property prices have yet to recover fully. As a result, affordable investments are available, particularly in areas like Liverpool, where the average property priisits around £176,000 (per HM Land Registry).

Every investor should perform due diligence before committing to a buy-to-let investment. However, by identifying the right areas with the best capital growth and rental yield potential, you may find properties that fit into your property investment strategy.

If you want to find out more about regional investment, read some of our handy area guides, including:

Author

Dale Barham

Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.