Brief Read: Buy-to-Let Market Enjoys Surge of Interest from First-time Landlords


Over the past few years, the private rented sector has proven challenging for some landlords due to tax and regulatory adjustments. However, despite additional and unexpected issues caused by the pandemic, the buy-to-let sector is undergoing a boom, particularly for buy-to-let investors under a company structure.

There are approximately 2.7 million buy-to-let landlords in the UK today, a 49% increase since 2015. And these new additions were mainly added by first-time landlords. According to research by the Knowledge Bank, for the tenth month running there has been a growing number of investors looking at buy-to-let property for the first time. 

The surge is largely due to a combination of an extended stamp duty holiday and ongoing low interest rates, with first-time landlords eager to take advantage of the savings. 

Cheap borrowing costs have encouraged first-time landlords to enter the market, with 90% loan-to-value (LTV) mortgages enjoying a particular boost. According to leading London estate agency Hamptons, around 50% of landlords used a mortgage to pay for their property in 2020, up from just 38% in 2017. 

Property in the UK is also viewed as a safe form of investment, particularly for first time investors. According to Nationwide’s house price index, the average UK property price was £23,730 around 40 years ago. Today it stands at over £230,000, around a 10 times increase. 

Getting the most from your buy-to-let investment

While returns have been boosted by house price gains in recent years, for most investors the long-term can still come from rental income.

Before making any investment, each investor should analyse their potential yield. This currently stands at an average of around 5.9%. For instance, using that average to calculate the gross annual yield (excluding all expenses) on a £300,000 property would see a return of £17,700 in rental income each year. 

The key to making the right investment is seeking out the right provider that puts your interests first. At GetGround we are experts in providing support for first-time and existing buy-to-let landlords. If you are considering setting up a limited company for your buy-to-let investment we can help with the structuring and management of the entire process.

Placing your buy-to-let properties into a company offers a number of benefits, helping the landlord to enjoy greater returns and tenants to receive improved standards and reduced costs. For anyone who is unsure where to start with setting up a limited company, GetGround can guide you from start to finish, ensuring everything is structured in the right way to enable you to maximise profitability.

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