If you’re a landlord or the owner of any investment properties, you were more than likely waiting for the new Labour government’s Autumn Budget in October with bated breath. Whilst, at first glance, the increases in stamp duty and capital gains tax (CGT) might seem like bad news for the property market, it’s really not all doom and gloom out there. In fact, now could be the perfect time to invest in property, particularly if you’re an investor that’s willing to adapt and evolve to the changing market.

There are opportunities out there

There’s no getting away from the fact that the increase in stamp duty on second homes and investment properties announced by the new Labour chancellor, Rachel Reeves, means an increase in fees on future property purchases, it’s worth remembering the potential return that investing in property can offer in the long term. The rise in CGT also announced in October, which increased the taxable amount on property sales, could trigger a rush to the market that may force prices down, meaning there will likely be opportunities out there for those actively looking to invest in property.

If you’re a savvy buyer who is able and willing to take a longer-term view, there are still good reasons to invest in property, particularly if there’s an increase in the number of properties coming to market. Owning a buy-to-let property is still a great way to ensure a regular income and a return on your investment over time, so now could be the perfect opportunity.

Are more landlords selling up?

Over the course of the next 12 months, 41% of landlords plan to sell their rental properties, according to recent research from Pegasus Insight, put together for the National Residential Landlords Association, adding weight to the theory that those seeking to invest in property right now are likely to find themselves in a strong negotiating position.

The UK property market desperately needs landlords to ensure the supply of rental properties can meet demand and investing in property is an excellent way to secure a regular income. Recent market data from the Office for National Statistics reported that, in the 12 months to September 2024, private rental rates in the UK increased by 8.4% overall and by 9.8% in London.

There is high demand from tenants

With property prices in many parts of the UK continuing to outpace average incomes, the demand for rental properties remains high and this is unlikely to change any time soon. In fact, if landlords do start withdrawing from the market, we’re likely to see more competition amongst tenants and the knock-on effect could be increases in rental rates.

Investment buyers with well-maintained properties in desirable locations, in particular energy efficient homes that will help tenants to save money on utility bills, will always do well in the rental market, particularly in city locations such as London, Birmingham and Manchester. If you’re looking to purchase a rental property, it’s worth also taking the time to consider who your ideal tenant is before buying your property. Think about what kind of specification and local amenities potential tenants are likely to want. The more in demand your property is from a rental point of view, the greater the likelihood that people will be willing to pay a premium to buy it.

More security for landlords and tenants

The current uncertainty in the UK rental market has also led to more tenants seeking to secure longer tenancy agreements offering them more security, which is good news for both landlords and tenants. According to a recent report, 44% of tenants, and roughly the same amount of landlords, were opting for one-year fixed-term contracts, with 37% interested in periodic tenancies with no fixed end date. This clearly demonstrates that stability, as well as flexibility, is becoming more important for both parties. The additional benefit of keeping the same tenant in place for landlords is that it also helps to reduce costs as the property is not left empty whilst new tenants are found.

Keep profitability in mind

With such constant levels of high demand in the UK rental market, owning buy-to-let properties has proved a resilient longer term investment, providing good returns on their capital.

If you’re looking to maximise the return on your investment, it’s worth considering properties that meet specific market areas, for example accommodation catering for professionals or student properties. Investing in property in these specific sectors can, if managed correctly, also lead to potentially higher yields.

To find out more about how Bamboo Auctions can help you with your investment property portfolio, get in touch with us today to speak to one of our experts.

(Important note: none of the above constitutes financial, tax or legal advice and buyers should always consult their own advisors for specific financial, tax or legal advice in relation to their investment strategy.)