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Discover why serviced apartments are the new buy-to-let
  • 8-12% NET annual yields
  • 10-year fixed income agreements
  • Professional onsite management
  • Full legal ownership
  • Zero costs for 10 years
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Buy-to-let property investment hub

Buy-to-let becoming buy-to-lose

Welcome to our buy-to-let investment hub. Here, you will discover why thousands of landlords are selling up and looking for new investment opportunities elsewhere.

Scroll through the hub to discover more or get in touch with one of our experienced BTL property consultants for further buy to let advice.

How buy-to-let works

The way buy to let works is quite straightforward. Essentially, you’re looking to buy a property as cheaply as possible and do it up to a sufficient standard to be able to rent it out, turning your initial purchase into a high-yield property investment in the process.

You’ll need to do your homework and make sure you’re buying where there is a steady demand for rental accommodation.

Obviously there is a balance to be struck between the condition of the property at purchase (if it’s a bargain, it probably needs a lot doing to it) and how much it will cost to bring it to a lettable state.

To maximise buy to let yield and rental income, you will probably want to convert, say, an existing dining room or a living room (or both) into further bedrooms.

Depending where your property is located, you may have to seek and obtain planning permission to do this.

When all conversion work is complete, all you need then is a full complement of tenants.

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Purchase property in prime location

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Work to maximise rental income

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Conform to licensing regulations

How much capital do you need to invest?

Buy-to-let mortgages aren’t bad value at the moment, but like most things they’re cyclical.

The average mortgage requires a 25% deposit for buy to let, which – given the national average residential property price of £220,713 – comes to just over £55,000.

Aside from the initial deposit, there are other buy to let rates and costs. The better the buy to let mortgage rate you’re offered, the higher the arrangement fee tends to be. This could be anything from £1,000 to £5,000.

Stamp Duty Land Tax will be just over £8,500, and you’ll be paying surveyor and estate agent fees too; allow at least £2,500, although it could well be more.

The average outlay for repairs to a house prior to letting is £5,750; this could obviously increase depending on its current condition and consequent conversion costs.

That means an initial capital investment of around £74,250.

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£55,000: average BTL mortgage deposit

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£11,000: Stamp Duty and agency fees

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£5,750: typical initial renovation cost

What are the key responsibilities?


You will be responsible for making sure the property complies fully with all national and local authority legislation for rental accommodation.

This will include fire prevention and escape measures, gas and electricity appliance inspections and installing furniture, fixtures and fittings which conform to health and safety standards.

In many locations you will be required to take out a landlord’s license, which will have to be periodically renewed.

You will need to advertise the property, be available for viewings, vet prospective tenants, check references, draw up tenant agreements and set up rent collection processes.

You will need to be available pretty much 24/7 to resolve any tenant issues which could be anything from a blocked soil pipe to a lost door key.

You can, of course, appoint a property agent to do much of this for you, but this could cost 7-17% of your rental income, depending on where the property is.

What are the risks?

“The only thing harder than finding a good tenant is getting rid of a bad one.”

It’s a well-known but all too true saying in the landlord community; finding good tenants takes up a lot of time, keeping good tenants does too.

But eviction, should the worst come to the worst, is not only a painfully slow and time-consuming process but frequently very expensive.

Legal costs, lost rent and vengeful tenants trashing the property can all be occupational hazards which eat into your income.

Void periods, when rooms are unoccupied and therefore not earning, are inevitable when tenants move on; you can’t show a prospect round a room someone else is living in. Unfortunately, your mortgage repayments still have to be made, so always budget for a void month each year.

Then there are unexpected repairs and replacements; some years it might just be a bathroom tile, others a brand new boiler.

Another risk is that capital growth is not assured; any buy-to-let property is subject to the volatility and cyclicality of the residential market. Resale may prove difficult or unprofitable.

Buy to let yields

What is the yield on buy to let property? It’s not that great, really.

Nationwide, NET income sits at 2% (Association of Residential Letting Agents). This means that the average buy-to-let property investor would have earned approximately £65,800 over the last decade – or 30% of the purchase price.

Manchester and Salford offer the highest yields available from buy-to-let property in the country. At nearly 7% gross, these are double the current level in London – same investment, twice the profit.

But even this seems a scant reward for so much effort and outlay, especially in view of new regulations that are increasing tax responsibilities for landlords.

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Average national yields: 2% NET

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Highest yielding UK city: 7% gross

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Average income over decade: £6,580

Why has it become increasingly difficult to make a profit?

Previously, buy-to-let owners could offset mortgage interest against income tax, but in the summer of 2015 it was announced that this would be phased out from 2017 – before being abolished completely in 2020.

The move attracted considerable comment in the media, particularly when it was followed in November of the same year by the news that a Stamp Duty surcharge would be levied on all second homes.

This abolition of tax relief as well as wear and tear allowances, along with the tightening of Capital Gains Tax regulations, may well see many private landlords pocketing a negative yield.

Take, for example, a higher rate taxpayer with a £100,000 interest-only mortgage owning a flat producing £750 per month rental income and costing £1,000 per year in service charges and ground rent.

In March 2016, they’d have made £1,560 NET profit. In April 2020, the same landlord and the same property will make just £360 NET because of the changes in legislation.

All these changes would seem to indicate that the days of mortgage-leveraged buy-to-let property are probably over – especially for higher rate taxpayers.

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Abolition of tax relief

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Abolition of wear and tear allowances

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Changes to Capital Gains Tax

Buy-to-let: comparison with purpose built student property

Higher yields, lower costs

Purpose built student accommodation has been the highest yielding UK property investment since 2011 (Knight Frank).

The sector has also proved itself recession-proof during this time, with demand, occupancy and resale values all unaffected by wider economic factors – in stark contrast to the unpredictable and reactive residential housing market.

The large size of these developments also means that the developer and management teams can use beneficial economies of scale to drive down costs, increasing the income available to property investors.

Not only are they exceptional value, the government actively encourages them and is charging zero Stamp Duty on any purchase below £150,000 while also making them immune from Capital Gains Tax at resale.

Quality purpose built student accommodation should deliver contracted 8-10% NET yields every year for 10 years.

Do not accept lower yields or shorter terms; this indicates that the initial purchase price is inflated and that resale will be problematic.

Less effort, fewer complications

Unlike buy to let landlords, who either do everything themselves or pay a managing agent, owners of purpose built student accommodation or serviced apartments enjoy a completely effortless income, leaving everything to a management team which is positioned onsite as part of the service.

The management is responsible for every operational aspect of the property, with highlights that include:

  • Vetting and letting
  • Rent collection and delivery
  • Maintenance
  • Repairs
What’s more, with all costs covered by the developer and management company, student property investors receive a true NET income.


Flexible resale options

Resale should be one of the first considerations when making an investment, and this video explains why our student property investments are easy to sell.

Our sector high yields and 10-year fixed income agreements mean that you can offer new buyers an annual income of 7% NET or more – always an attractive proposition and higher than the income on offer from new build alternatives on the market today.

You can also earn up to 40% capital growth through yield compression.

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As seen in:
Guardian: in the pressThe Times: in the pressCityscape: in the pressTelegraph: in the pressGulf Times: in the pressFinancial Times: in the pressAs seen in The Mail on Sunday