Getting the timing right when it comes to buying a property to rent out is crucial to landlords. Not only do they want to make sure they hit the property market at the moment when prices are affordable, but they need to ensure there is enough rental demand as well.
If property values are low, they might be able to grab a bargain, but at the same time, potential tenants will be more likely to get on to the housing ladder themselves. Therefore, there will be fewer renters available.
Over the last couple of years, property prices have remained relatively stable, with minimal changes in values. The latest Halifax House Price Index reported that prices have increased by just 2.9 per cent over the last year, which amounts to around £8,000 for an average home.
This is good news for landlords, as it means it could still be difficult for first-time buyers (FTBs) to get on to the market, while at the same time, property price increases have not been too steep for themselves to purchase one.
Over the next month, there could be a rush in the number of FTBs purchasing a home of their own, as stamp duty changes are set to change from April 1st 2025. After this date, the threshold for stamp duty will go from £425,000 for FTBs back to £300,000, which it was prior to October 2022.
While lots of people will be trying to avoid the levy by purchasing a house or flat for themselves in the next few weeks, many will still be unable to afford a property.
What’s more, after the beginning of April, it will become harder for FTBs to afford a property, which is good news for landlords.