Is Buy to Let a Good Investment in 2021/22?

Amy Jackson
Amy Jackson
Property Editor
Updated 01 October, 2021
5 Min Read

Is Buy to Let a Good Investment? Is Buy to Let a Good Investment?

Buy to let has historically been known as one of the best ways to make money through property. 

Offering both rental income and returns from capital growthbuy to let has the advantage of giving investors two types of return, which is something other asset classes like stocks and shares are missing. 

But is buy to let what it used to be? Is buy to let a good investment to make? Is buy to let property still worth it in 2021 and 2022? 

That’s what we’re here to find out. 

In this insightful blog post, we’ll look at arguments for and against investing in buy to let right now.  

Looking at the latest research and analysis, we’ll help you decide whether or not buy to let is the right venture for you. 

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Is Buy to Let Still Worth it? Here Are Four Reasons to Invest in Buy to Let

As for the question ‘is buy to let still a good investment in 2021?’, there’s no question when it comes to house prices 

If you’ve been keeping up with the UK housing market over the past year, you’ll know that average property prices are skyrocketing. 

This house price growth may not be good news for first-time buyers looking to get their foot on the property ladder, but for buy to let investors, it signals a lucrative investment. 

By investing in buy to let property right now, you’ll be able to purchase properties at affordable rates before even further property price growth comes into effect. 

Just look at the predictions from Savills on how the UK property market is set to perform over the coming years. 

Values Forecast

As the graph shows, by 2025, UK house prices are predicted to grow by 21.5% on average. In the North West, property prices are set to increase even higher with 28% growth. 

Over the past year, record-breaking house price growth rates have hit the UK, making now the best time to invest in the buy to let market. 

Securing the highest rental yields is crucial if you want to get the most out of your buy to let investment.  

The more rental income you can generate, the better. But is buy to let a good investment right now when it comes to rental yields? 

Thankfully, rental yields in the UK are at some of their highest levels – a major reason to invest in buy to let in 2021 and 2022. 

The buy to let hotspot cities of recent years, like Liverpool and Manchester, offer some excellent rental yields with no sign of a rental market slowdown. 

Buy to let property for sale in Liverpool right now, such as our popular project, ELEMENT – The Quarter, offer NET rental yields of 8%.  

Recent data has also revealed that the time it takes for landlords to rent out a property has fallen drastically, which means demand is higher than ever.  

In April 2019, it took landlords an average of 31.9 days to rent out a property, while in 2021, it’s taking just 8.9 days on average 

If you’re investing in property through a property investment company but wondering how to buy a buy to let property, the process may surprise you. 

Unlike when investing in some other asset classes, buying a buy to let property in this way is simple.  

The property investment company you work with can take the hassle out of the process by connecting you with the best opportunities, helping with solicitors, and assisting with each stage of the buying process. 

Payment plans are also available to help investors who don’t have the full sum of cash available secure their investment. 

If making passive income is one of your main motives for getting started with buy to let, you’ll be glad to know that buy to let is actually one of the best ways to make passive income. 

That’s because it’s possible to make income from your investment without having to get involved with time-consuming commitments. 

Hiring a rental management company to help you run your rental property is the best option for this. 

This means you can make passive income from your buy to let purchase without any landlord duties.  

There are so many great rental management companies that take the hassle out of managing a buy to let investment. 

If you’re working with a property investment company to buy your buy to let property, the company you invest with will often recommend quality rental management companies to help you manage your investment.  

If you’re asking, ‘is buy to let worth it or shall I explore easier options?’, you can rest assured that buy to let has the potential to be just as hands-off as any other venture. 

1. Property Values Are Growing Fast

As for the question ‘is buy to let still a good investment in 2021?’, there’s no question when it comes to house prices 

If you’ve been keeping up with the UK housing market over the past year, you’ll know that average property prices are skyrocketing. 

This house price growth may not be good news for first-time buyers looking to get their foot on the property ladder, but for buy to let investors, it signals a lucrative investment. 

By investing in buy to let property right now, you’ll be able to purchase properties at affordable rates before even further property price growth comes into effect. 

Just look at the predictions from Savills on how the UK property market is set to perform over the coming years. 

Values Forecast

As the graph shows, by 2025, UK house prices are predicted to grow by 21.5% on average. In the North West, property prices are set to increase even higher with 28% growth. 

Over the past year, record-breaking house price growth rates have hit the UK, making now the best time to invest in the buy to let market. 

2. Rental Yields Are High

Securing the highest rental yields is crucial if you want to get the most out of your buy to let investment.  

The more rental income you can generate, the better. But is buy to let a good investment right now when it comes to rental yields? 

Thankfully, rental yields in the UK are at some of their highest levels – a major reason to invest in buy to let in 2021 and 2022. 

The buy to let hotspot cities of recent years, like Liverpool and Manchester, offer some excellent rental yields with no sign of a rental market slowdown. 

Buy to let property for sale in Liverpool right now, such as our popular project, ELEMENT – The Quarter, offer NET rental yields of 8%.  

Recent data has also revealed that the time it takes for landlords to rent out a property has fallen drastically, which means demand is higher than ever.  

In April 2019, it took landlords an average of 31.9 days to rent out a property, while in 2021, it’s taking just 8.9 days on average 

3. It’s Easy to Get Started

If you’re investing in property through a property investment company but wondering how to buy a buy to let property, the process may surprise you. 

Unlike when investing in some other asset classes, buying a buy to let property in this way is simple.  

The property investment company you work with can take the hassle out of the process by connecting you with the best opportunities, helping with solicitors, and assisting with each stage of the buying process. 

Payment plans are also available to help investors who don’t have the full sum of cash available secure their investment. 

4. It’s a Great Way to Make Passive Income

If making passive income is one of your main motives for getting started with buy to let, you’ll be glad to know that buy to let is actually one of the best ways to make passive income. 

That’s because it’s possible to make income from your investment without having to get involved with time-consuming commitments. 

Hiring a rental management company to help you run your rental property is the best option for this. 

This means you can make passive income from your buy to let purchase without any landlord duties.  

There are so many great rental management companies that take the hassle out of managing a buy to let investment. 

If you’re working with a property investment company to buy your buy to let property, the company you invest with will often recommend quality rental management companies to help you manage your investment.  

If you’re asking, ‘is buy to let worth it or shall I explore easier options?’, you can rest assured that buy to let has the potential to be just as hands-off as any other venture. 

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Two Reasons Not to Invest in Buy to Let Property Two Reasons Not to Invest in Buy to Let Property

Is Buy to Let Still Worth it? Here are Two Reasons Not to Invest in Buy to Let 

1. Buy to Let Taxes Put Some Investors Off 

There are several taxes that buy to let property investors need to pay, and for the more tax-averse, these can be viewed as a downside. 

Taxes include stamp duty on buy to letincome tax, and capital gains tax which is payable if your property has grown in value by the time you sell it and exit your investment. 

With stamp duty tax in England and Northern Ireland, buy to let investors often have to pay a surcharge (which is slightly higher still for overseas buyers), which can put some investors off buy to let as a whole. 

However, the tax you need to pay on buy to let investments isn’t all bad. In many cases, the amount that you need to pay will be lower than you think. 

Tax relief is available on stamp duty tax for those buying property worth less than £125,000. Lower rates of tax are available for first-time buyers who are purchasing a rental property while not already owning a home of their own. 

Be sure to read more about buy to let taxes and how they apply to your specific investment before deciding against a buy to let venture. 

Learn about the latest buy to let rules and taxes you should know about in 2021 with our helpful blog post. 

Buy to Let Is Not a Short Term Strategy Buy to Let Is Not a Short Term Strategy

2. Buy to Let Isn’t a Short-Term Strategy 

Many people new to buy to let will wonder, ‘if I want a short-term strategy, is buy to let a good investment? 

The truth is that if you’re looking for an investment strategy that makes full returns in a short space of time, buy to let isn’t for you. 

That’s because, unlike different strategies like property flipping, it’s beneficial to hold onto a buy to let property for many years before you consider selling. 

By treating buy to let as more of a long-term investment, you can reap the full benefit of many years of rental income as well as maximum capital growth once property prices have had enough time to grow to new levels.  

Property investors who aren’t willing to wait to see these lucrative returns may wish to explore alternative options. 

Find Information On Everything You Should Know About Buy to Let With Our Ultimate Buy to Let Guide

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Is Buy to Let a Good Investment For You Is Buy to Let a Good Investment For You

So, Is Buy to Let a Good Investment For You? 

  • Are you looking to make high capital growth returns? 
  • Do you want to generate an attractive rental income month after month? 
  • Are you looking for a hassle-free and hands-off venture that helps you make passive income? 
  • Are you prepared to hold onto your investment for several years to truly maximise your earning potential? 
  • Are you prepared to pay the rate of tax as required for your purchase?  

If your answer to these questions is yes, then buy to let is an excellent investment for you to consider. 

By buying a student or residential property in the UK and renting it out to tenants, you can really maximise your money and meet financial goals.  

As of 2021, right now is one of the best times to invest due to upcoming property price and rental market growth, with regions across the UK expecting even more of a significant housing market boom. 

So what are you waiting for? Take your first step towards your financial goals and explore the buy to let investment opportunities available on the market today. 

Contact RWinvest, and we can connect you with the most exciting, below-market value opportunities, all of which offer high rental returns, strong growth, and demand. 

Whether you want to invest near London, in the North West, the Midlands area and beyond, we have buy to let offers that you’ll want to know about. 

Amy Jackson
Amy Jackson
Property Editor

Amy Jackson is the property editor at RWinvest. Amy has over three years of experience working in the property content sector and has a keen eye for finding the latest news, statistics, and must-have property investment information.