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Guest Blog: The Professional Buy-To-Let Investor’s Ebook – Part 1.

October 17, 2017

RubanScreenshot 2017-10-18 08.31.01

This week, we’re handing over the Optimise Accountancy blog to a Guest Blog contributor from Property Solvers Investor Services – Ruban Selvanayagam, who will be carrying out a weekly serialisation here of his recently-published Ebook called ‘The Professional Buy-To-Let Property Investors Ebook’ for readers.

The Ebook carries out a thorough review of the property investment sector in the UK, highlighting new legislation to be aware of:

  • PRA criteria explained in full
  • surviving post-Section 24
  • due diligence toolkits
  • rental market research
  • management tools to utilise, and much more.

For the first week, it’s a quick overview of the upcoming Ebook series for our readers, so over to Ruban.

“The first edition of this report has been compiled at a time when investor landlords are slowly becoming accustomed to a multifaceted sea change in the buy-to-let operational environment.

Firstly, the enhanced under writing framework formally implemented from January 2017 by the Prudential Regulation Authority (PRA) has essentially limited the level of allowable leverage on individually-owned investments.

Secondly, although the impact will not truly start to reverberate across the sector until 2018/19, the erosion of mortgage interest tax relief resulting from Section 24 of the Finance Act (no. 2) 2015 will raise liabilities for mid to highly-geared landlords with personally owned properties
Other obstacles include the punitive stamp duty surcharge on second property acquisitions (from April 2016) alongside wider landlord licencing, the removal of wear and tear tax relief for houses of multiple occupation (HMOs), greater regulatory compliance requirements, increasingly challenging eviction procedures, housing benefit caps and issues related to the ongoing rollout of Universal Credit.
The inevitable macro-led turbulence resulting from Britain’s impending departure from the EU and the spectre of rising inflation can also not be forgotten.
It would therefore come as no surprise that retail investors are currently questioning how sustainable the buy-to-let sector actually is.
Whilst this is a fair and valid concern, it is our belief that there will be a certain breed of investor landlords with long-term outlooks who will learn to adapt to the complexities, look beyond the get rich quick mentality that frequently dishonours the sector, and indeed capitalise on the changing landscape.
The demand for good quality rental accommodation will still be very much necessary and it will be the professional landlords adopting a ‘corporatised’ buying strategy that look set to benefit.
Above all, investing in strong yielding regions of the UK whilst minimising any negative exposure created by over-gearing will be paramount.Reflecting this tougher operational environment, we have started this guide by outlining what the latest PRA criteria will mean for buy-to-let investors, followed by a broad overview of the tax implications of Section 24 of the Finance (No. 2) Act 2015 alongside some of the pros and cons of the mitigation strategies being disseminated across the sector.

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Download our property investment guide here

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In the subsequent chapters, we list some of the most up-to-date macro and micro due diligence resources/methodologies, provide recommendations on how to work with good tradespeople, cost-out refurbishment works effectively before broadly elucidating on our financial dashboard and Special Purpose Vehicle (SPV) Limited company set up and financing for buy-to-let acquisitions.

Finally, we overview how the PS Investor Services operate as a direct-to-vendor property sourcing company.

Our intention is to regularly update this report and we would very much welcome your ongoing feedback and suggestions for future content via info@psinvestors.co.uk, or please feel free to call us during office hours on 020-8722-0369.

Regardless of whether you look further into using our services, we would like to wish you all the very best with your investment aspirations.”

Do you have a tax question that you want answering?

Please use the redeem code “Article 33” to get 33% off your next consultation call.

To sign up for regular updates from Ruban and his team, please visit here.

To find out more about Property Solvers Investor Services, please visit here.

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Telephone: 0115 939 4606
Email: simon@optimiseaccountants.co.uk