Is property still a good investment in 2023?
Despite falling house prices, property remains a good investment. This is particularly the case for landlords who are looking to hold on to their properties for the long term.
The combination of monthly rental income and capital gains over time (with house prices expected to recover in the next few years), landlords can benefit from a healthy return on investment.
Compared to other types of investment, such as stocks and shares, property is seen as one of the most reliable. This is because average values tend to rise over time, while people will always need homes to live in so demand is likely to remain steady.
Is it worth being a landlord in 2023?
From upcoming rental reforms to rising costs and changing energy efficiency rules, there’s no denying that there are plenty of challenges for landlords at the moment.
Tax changes in recent years mean that renting out a property is less profitable for many landlords. However, as explained above, owning property for the long term remains one of the most reliable forms of investment.
Despite challenging conditions, rental demand continues to outpace supply. This means that landlords are unlikely to have long void periods (times when their property is empty) while rental prices keep growing.
Rightmove data shows that in July 2023 the average asking rent for a typical home outside of London was 33 per cent higher than at the same time pre-pandemic in 2019.
In the same month, the current average time to find a tenant for a rental property was just 17 days, the shortest amount of time since November 2022.
So despite a changing market, landlords who manage to find good tenants and keep them for the long term will probably continue to see buy-to-let as a worthwhile investment.
Are you planning to buy a rental property this year? Let us know in the comments below.