How Landlords can slash their buy-to-let costs
The buy-to-let sector has been targeted by the chancellor through the 3% stamp duty increase as well as the wear and tear allowance.
This has left landlords looking at other ways in which they can save money on their portfolio. The following tips will help to save money without having to hand it all over to the taxman.
Evaluating your portfolio
This means taking a look at what properties are available at a knock-down price that offer good rental returns. There are many areas that are on the increase but also have low house prices. Beyond London, many of the area have seen house prices stabilised and these are often ideal places to purchase.
Areas such as Luton and Swindon are high on the list as well as Manchester and Liverpool where yields are around 5-6%.
Find a new mortgage deal
Interest rates are at the lowest they have ever been and this means that landlords can get excellent deals. This can help to reduce mortgage repayments and this means more of the rent can go into your pocket. It also allows you to release some equity that can be used to increase your portfolio.
Rates have fallen and this can be seen in the average rate dropping from 5.21% that was seen in 2011 to 3.32% which can be found today. The average rate for five year deals has also dropped.
Take a look around for insurance
Insurance is a crucial tool for all landlords as it offers protection for their property and their returns.
Check your renewal quote against previous years and find out what you are covered for. You may be paying for cover that you do not need or you may even realise that you need extra cover.
Putting the right security measures in place can help to bring the cost of your cover down and you could always increase your excess in order to bring costs down.
Expenses Claims
While the mortgage interest relief is being changes there are other expenses that you can claim back. All fees that are linked to your buy-to-let property investment can be offset against your final tax bill along with insurance premiums and mortgage arrangement costs.
The smaller things such as stationery and even your phone bill all add up so ensure that you claim for these.
Is a letting agent necessary?
While a letting agent can do all the hard work for you, they do charge a decent fee for their time and expertise. Some charge as much as 10% and while this may be worthwhile, it is still a large chunk of your income so downgrading the service that you use can save a considerable amount. In fact, you could even manage the whole thing yourself if you have the time, helping you to save even more money.
Run it through a limited company
You could run your buy-to-let business through a limited company and this would mean you would pay corporation tax which is being reduced over the next few years from 20% to 17%. You would also benefit through not having to succumb to the mortgage interest relief changes that affect individuals.
You May Also Enjoy
Top tips to make your home winter-ready for a successful sale
Propertymark Annual Sales Price Report 2025
Lloyds reveals its 2025 housing hot spots
2025: A landmark year for UK renters and homebuyers – what consumers need to know
Are ‘for sale’ boards becoming obsolete?
