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Is 2017 the year to become a property investor?

2016 was one of the most eventful years for Britain, with the EU referendum and addition of stamp duty taxation of second properties. Taking these events into consideration, it is now time to consider whether 2017 is the year to become a property investor.

How 2016 affected property investors

The property market changed in 2016 with the addition of stamp duty tax of three percent on second homes, introduced on 1st April 2016. This had more of an impact on the property market than Britain’s decision to leave the EU, according to the RICS (Royal Institute of Chartered Surveyors).

Some buy-to-let landlords put off adding new properties to their portfolio in 2016, because of the stamp duty addition on second properties.

Property investing in 2017

While it is impossible to know how 2017 will unfold, the first signs suggest that 2017 will be a good year to become a property investor. The reduction in the number of new rental properties in the UK looks set to increase rental prices as housing demand outstrips supply.

The gap between house prices and earnings will continue to widen, also leading to an increased demand for rental properties. With both demand for rental properties and rental prices increasing, 2017 there is now more of an opportunity for property investors to offset tax losses.

Property prices in 2017 are predicted by development finance lenders to decrease in London, but increase elsewhere, making property investment attractive in cities such as Birmingham and Manchester.

Property investment course

New would-be property investors are advised to attend a property investment course or seminar, in order to avoid the common pitfalls and gain an understanding of property investing in 2017.

Individual landlords may be affected by Section 24, which is being phased in over four years, from April 2017. Section 24 will affects the amount of tax relief that landlords can get on residential properties.

Because of Section 24, new individual property investors need to carefully consider whether it is preferable to trade as a limited company, as these changes do not apply to companies.