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Mortgage lender study shows long-term property investment delivers significant returns

Jamie Royston

Far from being dead and buried, Britain’s buy-to-let market is alive and kicking. This is the message delivered by analysis carried out by the mortgage lender Kent Reliance.

According to the report, landlords throughout the UK are expected to make hundreds of thousands of pounds in profit from their buy-to-let investments over the next 25 years. Investors in the London property market stand to make up to half a million in profit, the analysis predicts.

The mortgage lender’s evaluation of the market suggests that over a 25-year period, a basic rate taxpayer who invested a typical buy-to-let deposit of 30% equating to £73,908, would generate a total profit after all costs and taxes of £265,500. Taking in rising inflation during the next 25 years, in real terms, this would represent a £162,000 profit, equalling £6,475 per year.

In London, despite being the most expensive place in the country to purchase property, landlords can expect to make the biggest profits. Kent Reliance forecasts that on a property that brings in an annual rental income of £9,964, landlords can expect to make £263,766 over 25 years.

The mortgage lender’s forecasts differ significantly from region to region but even in less expensive parts of the country, such as the North East and Wales, landlords can expect to make tidy profits on their rental investments during the next 25 years.

This promising forecast of Britain’s buy-to-let landscape comes despite sweeping government reforms to the buy-to-let sector in recent years. The changes included a 3% surcharge in stamp duty on buy-to-let purchases and the abolition of mortgage interest tax relief.

Talking to This Is Money, John Eastgate of One Savings Bank, which owns Kent Reliance, spoke of the rising costs being forced on landlords in Britain, stating:

“In spite of rising costs, there are still healthy returns to be found in property for committed investors.”

If you are thinking about joining landlords profiting from property investments and getting your foot on the buy-to-let market or increasing your investment portfolio, property auctions can be the perfect place to find your rental investment.

Check out the current lots available in our forthcoming property auction in London.

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