Benefits of Investing in New Build Homes
There are many reasons why new build homes and new developments are popular today. One, the mortgage interest rate on new build properties are favorable and at an all-time low. There is also an increase in demand with the shift in holiday patterns by UK residents and nonresidents. These factors compounded by the favorable tax advantage that investors are receiving today. These factors along with others make this a great time to get back into the real estate market.
New build homes market is booming in part because of the low interest rates on mortgage. Many people who once found real estate out of their reach are buying new homes more than ever. Since, the reduced interest rate makes these homes more affordable. Thus, real estate agencies all over the UK are seeing an influx of first time homebuyers looking for new build homes. In addition to the new homebuyers, they are seeing many people looking for their first or second holiday home. These factors have created a demand for new developments.
Since the mortgage crunch in 2007, statistics show that housing prices have risen steadily. One area that has shown increase growth is in second home development market. Thus, many investors are taking advantage of the changing markets and buying second homes. Some are using these homes as rental because many UK residents now choose staycation on their holiday rather than travel to other countries. Thus, rental on these new homes last in most cases the entire year rather than the peak summer holiday period. Thus, an investor can rely on steady income from their investment property all year long.
Taxes are usually a big concern when someone decides to invest, but new build homes have several tax advantages. One the capital gains rate when the property is sold is less than the normal tax rate because holiday lets are included in the Entrepreneur’s Relief rules. Not only that, it is possible that the sale may meet the Business Asset Roll Over Relief program that let landlords use the proceeds from the sale to reinvest into other investment vehicles and defer the capital gain tax payments.
Investing in new build homes today is on the increase because of demand and new developments and will continue to be in demand for years to come.
