Should I invest in Buy-to-let in 2023?

Activity from private buy-to-let landlords is in continuing decline whilst tenant demand for rental properties is rising steadily.

By now you will be very aware of the rental crisis sweeping across the UK. Activity from private buy-to-let landlords is in continuing decline whilst tenant demand for rental properties is rising steadily. This mis-match of supply and demand is causing sky-rocketing rental prices and a sense of instability for both tenants and landlords.

Why are landlords selling up?

During the pandemic, large numbers of private landlords made the decision to seize the opportunity of the huge sellers market and sell their investments. Additionally, when Rishi Sunak introduced the Stamp Duty Holiday, this in turn contributed to the mass trend of landlords selling their properties and stepping out of the buy-to-let market.

Whilst several years have passed, the UK is still feeling the effect of this decrease in private landlords. The trend has been intensified over the past year by a lack of new landlords wanting to join the buy-to-let market.

There are several factors which may be contributing to hesitance to invest in buy-to-let properties in 2023:

  • The current rental crisis is creating a lack of certainty and stability to reassure new investors.
  • New regulations introduced towards the end of 2022 restrict landlords on tenant eviction.
  • Sustainability quotas demand landlords make costly eco upgrades to properties before 2030 which could be off-putting for landlords wanting to make a long-term investment.

Why should you invest in Buy-to-let now?

After reading the above you may be concerned about the potential hurdles of stepping into the buy-to-let market in 2023. However, with smart planning 2023 could be the perfect time to invest.

We know that historically the best time to make an investment is when the property landscape looks bleak. Buying competition is low and house prices continue to plummet across the country - But this could be a positive thing for new investors as new affordable investment opportunities arise.

With increasing rental demand you will be able to charge higher rental prices, driving up yields for properties which were bought for lower prices.

If you are still considering selling-up, it’s worth considering losing your more expensive properties in the South and investing in new affordable properties in the North. Rental yields are increasing rapidly around cities such as Birmingham and Manchester, now could be the perfect time to capture these opportunities whilst property prices are still low.

Whilst no investment is risk-free, a property investment strategy tailored for the current market can still yield very profitable results. There will be some short-term hurdles which come with investing during a rental crisis but the right investments should lay a strong foundation for a lucrative long-term investment.

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