Investing in UK Buy-to-Let 2021

With the new year in full swing, here are a few key points to consider if you’re looking to start investing in UK Buy-to-Let property

How is the Buy-to-Let Property Market Performing in the UK?


It’s not surprising this is a common question as we continue to live through unprecedented times. The start of a new year is a popular time to re-evaluate investment portfolios and this year is no different: should you invest in UK Buy-to-Let property in 2021?

There’s no doubt that it’s an interesting time to be investing in UK Buy-to-Let. After the property boom at the end of 2020, followed by the final Brexit transition deal delivering some certainty to the market, there’s plenty of potential.

One of the most important things to remember is that property still remains a resilient, stable investment market. Historical evidence shows that property has the power to weather huge events such as the global financial crisis and the SARS outbreak, coming out of the other side stronger.

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The market’s reaction to COVID-19 seems to follow suit, reaching record-breaking levels of activity after the market shut in March last year. Since then, it’s achieved ever higher levels even as other assets fail. 

Generally, the outlook for the market is positive, despite some setbacks in key regional areas. While many cities are expected to see prices fall slightly in 2021, nearly every major UK city is expected to see accelerated growth from 2022 onwards. Birmingham is leading the way, remaining flat in 2021 with property prices forecast to rise by 19.5%, closely followed by the South East, which is expected to continue benefiting from those leaving London.

With interest rates still at rock bottom and mortgage availability growing, this means there’s a window for investors to get in before growth starts to drive prices. With the stamp duty deadline fast approaching, it’s no surprise we’re seeing transaction activity ramping up to a point it’ll likely sustain sales throughout the year.

Take a Look at Our Buy-to-Let Properties

Crossrails Premier Development

The Metalworks
2 Bedroom Apartments, 3 Bedroom Apartments, Off-Plan

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No.1 Thames Valley
1 Bedroom Apartments, Fully Tenanted, New Build

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Churchill Place Ready-Made Investment
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Game-Changing Development

The Grand Exchange
1 & 2 Bedroom Apartments, Luxury Penthouses, Off-Plan, Studios

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Growth of the UK Rental Sector


The UK rental market continues to be one of the fastest growing sectors in the country. Even despite the challenges posed by lockdown, we’re seeing tenant priorities changing and a whole new wave of renters enter the market. 

While Generation Rent is still in full swing – an entire demographic of younger renters either disillusioned with buying (or in many instances, unable to buy in the first place) – we’re now also seeing older demographics uprooting for the flexibility that renting can offer.

It’s still estimated that by 2039, renters will outnumber homeowners in the market, highlighting the demand that is growing across the UK.

Now imagine that you have a high-quality investment in an emerging market that is part of the fastest growing sector in the country. This is why UK Buy-to-Let remains a popular asset for any investment portfolio.

Is Buy-to-Let a Good Investment?


Ultimately, the answer to this depends on your personal circumstances. If you’re looking for quick, liquid assets, Buy-to-Let probably isn’t for you. 

If you’re looking for stability and long-term growth, on the other hand, Buy-to-Let property can be an excellent investment.

According to Gary Smith, Financial Planner at Tilney: “Buy-to-Let properties still remain as popular, as investors look at the relatively high-rental yields that can be achieved when compared to interest rates and annuity rates.

“It is relatively easy and people understand it… They are not exposed to investments they do not understand and you can do it yourself without too much technical knowledge. From that point of view, buying a Buy-to-Let is quite an obvious thing to do but you do need to understand the pros and cons.”

While property has long been at the mercy of Brexit uncertainty, a finalised deal and relatively smooth transition should go some way in restoring confidence back in the market. Similarly, recovery following lockdown has highlighted the potential in the market, provided you perform the necessary research and pick out the right locations.

It’s this demand and relatively low supply that is creating new opportunities for the smart investor – both domestic and international. It’s true now, more than ever, that the right investment in the right place can deliver incredible returns. For investors, a Buy-to-Let property within a wider portfolio can be an easy way of building consistent and adaptable passive income for the long-term.

What are the Risks of UK Buy-to-Let in 2021?


Trust In Developers  

As with any investment, there is always an element of risk to be considered. In a property investment, this can largely be mitigated by having trusted partners and diversification in your assets. Firstly, get to know your developer and check their past performance. If they specialise in off-plan property, for example, look at whether their projects completed on time and the overall reviews they received.

Void Periods

One of the main pitfalls that affects investment, void periods occur when a rental property is empty and not generating any income. These are particularly damaging when they’re multiplied over a portfolio, especially if the investor is using any income to pay off the related mortgage. With no returns, this can quickly result in a net loss, as they’ll be using their own money to make repayments. 

The best way to combat this is to consider a location with consistent tenant demand, work with local lettings agents that have a good understanding of the local market and creating a ‘rainy-day’ fund that can be accessed in the event of an unexpected void period. This is extremely useful in a pinch and will ensure the majority of costs are mitigated should they arise.

Buy-to-Let Property Taxes You Should Consider


  • Tax On Purchase – Stamp Duty Land Tax
  • Tax During Ownership – Income Tax
  • Tax On Sale – Capital Gains Tax
  • Tax on Death – Inheritance Tax (IHT)

Tax is a vital aspect of any investment in the UK property market. Whether you’re a domestic buyer or investing from overseas, understanding the tax implications can mitigate issues further down the line. Here we run through UK property tax considerations, though every investor’s situation is different and specialist advice should always be sought.

  1. Read full article on UK Buy-to-let taxes
  2. Property tax for overseas investors

Should You Invest in UK Buy-to-Let in 2021?

Ultimately, property shouldn’t be seen as a quick purchase or investment. If you’re looking to buy a home – chances are you wouldn’t be thinking about selling up again in less than five to 10 years. The same thing applies to property investment. It’s likely that you’ll be looking for long-term gains and while no investment is 100 percent safe, property should be seen as a marathon not a sprint.

This is especially true for those that want to use property to secure their financial future. The new state pension of £168 per week is simply not enough to live off, this is why we encourage investors to look at retirement planning more broadly, especially in terms of investment. Buy-to-Let property can be a useful way to save for a happy and worry-free retirement. For those that are looking to the future, investing in property should rightly be the top consideration when planning a portfolio.

As with any investment, ensuring proper due diligence throughout your journey can stop issues further down the line and working with trusted partners can make the whole process much easier so it’s generally a good idea to speak with specialists wherever possible.