The Truth is that the Future prospects for buy-to-let lie mostly in the hands of the politicians. Not because they may implement penal tax fees on landlords as was feared by taking away the ability for landlords to cancel the interest on their buy-to-let loans from rental income when calculating their leasing company’s profits; or even by continuing with the introduction of more onerous bureaucracy like the Tenancy Deposit Scheme or Houses in Multiple Occupation (HMO) licensing. No, the main Effect that politicians will have in the coming months and years is their approach to immigration.
Immigration key to buy-to-let prospects
There’s no doubt that Immigration has made a gigantic contribution to the UK economy, not least has this been observed from the UK’s housing industry. The skills of new Immigrants are essential in keeping the building rates in Britain over the last couple of years. Shortages of skilled plumbers, electricians, etc could have done much to have held back the building of new homes facilitating more shortages and adding additional to high rates of house price inflation.
However, the dilemma for policy makers and politicians is these skilled employees all require home & are potential tenants or homeowners. Therefore they in their own right also increase the pressure on accommodation. The most recent figures produced by the Government have shown they have underestimated the amount of overseas workers in the UK; it is currently put at 1.1million or between 7-8% of the UK workforce.
For many landlords the Demand for rental accommodation from such workers that are frequently substantial quality tenants has become a ‘godsend’ and encouraged many landlords to expand their portfolio away from the back of it.
Latest housing projections
The Most Recent population projections published by the ONS (Office for National Statistics) have revised upwards estimates of net immigration from 145,000 to 190,000. The forecast now is the UK’s population will increase to 65 million in 2016 & then 71million by 2031; a leap of 10.5 million on present levels. This further calls into question the ability of the United Kingdom house builders to give sufficient Numbers of dwellings to accommodate this growing demand. Existing Projections for home building before the revised population indicates that their will last be a shortfall of housing each year of approximately 33,000 dwellings.