The Prospect Of Fi-To-Let Going Into 2023
2022 was a particularly successful year for the buy-to-let (BTL) sector and the investors who were involved. Throughout the year, the number of buy-to-let homes and mortgages increased significantly. According to USwitch, the private renting sector (PRS) is now the second largest housing tenure in the UK, accounting for around 4.5 million UK households. USwitch also published a summary of BTL statistics for 2022:
- £8.5 billion worth of buy-to-let properties were purchased by UK landlords in Q1 2022.
- More than 211,000 buy-to-let mortgages were approved by UK lenders, and occupied 13.6% of total mortgage lending for the year.
- Consumer buy-to-let mortgages in 2022 are valued at approximately £955 billion, with buy-to-let mortgage advances worth £41.8 billion.
- There are currently 2.74 million landlords in the UK, with more than two-thirds (68%) over the age of 55.
- Milton Keynes has seen the greatest growth in buy-to-let properties with a 667% increase between 2021-22.
- The average UK landlord has eight properties in their portfolio, generating a gross annual rental income of around £61,000 per property.
With many BTL investors actively searching for opportunities this year, we can expect this trend to continue in 2023. The rise of BTL allows other strategies to be maximised to their full potential. Property investment is the most secure investment option in the United Kingdom. Property assets will always exist and grow in value over time, as opposed to stocks or cryptocurrencies, which are extremely volatile and can fluctuate overnight. BTL property investments are based on fundamentals, as opposed to cryptocurrency pump and dump tactics, making property the smartest investment. This article will concentrate on Fi-To-Let, our ground-breaking investment strategy that combines the advantages of fractional investing and buy-to-let.
Fi-To-Let enables investors to buy property fractions for use in buy-to-let portfolios. Investors can expect pre-tax cash yields of 12-18% per year on money invested, as well as capital gains that compound over time. As property prices and local economies rise, so will investment in Fi-To-Let portfolios. According to Hamptons, the average rent in the UK increased by 7.9% year on year in November. Fi-To-Let has several advantages over regular BTL investing for investors:
- Purchasing ownership fractions of Novyy properties allows for a seamless ownership which negates the responsibilities of management and maintenance.
- All Novyy properties are mortgage approve and funded by senior lenders and banks, the authenticity and integrity of these assets are of the highest quality and have been acquired after thorough due diligence.
- Income from investments is always being generated as the properties that we engage on are already rented or have reached a rental agreement.
- Rather than going through physical paperwork and many face-to-face meetings, purchasing property fractions in a digital experience with Novyy. After a KYC-AML verification is completed, investors can browse opportunities and wire transfer a purchase.
Fi-To-Let offers numerous beneficial benefits to prospective investors. Traditional BTL has never been able to accomplish such ease of use and control. After making an investment, the investor will not have to worry about property management, due diligence, or mortgage funding because we will handle everything. This customer-first approach is poised to propel Fi-To-Let to the forefront of property investing in the coming year.
Fi-To-Let seeks to overcome all of the drawbacks of traditional BTL, such as the lengthy process of obtaining a position on the property ladder with BTL. In this regard, Fi-To-Let tries to meet customers' best interests.
Property hunting can be a time-consuming and strenuous activity, and finding the right property at the appropriate price can be a difficult component of investing. Novyy already has deals in place for investors to capitalise on, and there is also the possibility of researching an external property presented out by a customer, but it must match the standards we have established. In terms of mortgages, BTL mortgages are frequently inaccessible unless a deposit is made, as well as confirmation that your present income stream can cover the interest payment. With Novyy, we fund the mortgage through our institutional funding, which eliminates all of the difficulties associated with obtaining a mortgage.
The most effective BTL properties are typically kept in limited companies, which necessitates the involvement of an accountant to ensure compliance between the investor and tax legislation. With Novyy, we manage everything, saving the investor a lot of time. Legal fees are another time-consuming part of BTL acquisition. The investor would need a solicitor to handle due diligence and stamp duty. Novyy pays for all professional charges owed to third parties. The most significant distinction between traditional BTL and our Fi-To-Let is the reduction in ongoing costs. Traditional BTL requires you to solely manage the property, including agents, accountants, income tax, landlord insurance, and maintenance. At Novyy, it is our responsibility to bear ongoing costs for our properties.
Property investors have never had the convenience of acquisition that Novyy offers. Looking ahead to 2023, this approach will give investors the most flexibility when it comes to investing in real estate.
By offering a fraction of the cost of acquiring a property, Novyy aims to make property more accessible to investors of all ages and backgrounds. With us, you can invest as little as £10,000 in property fractions. With BTL investments, a deposit of 5-15% is required, as well as all administration and maintenance expenditures upon acquisition of the property. With Novyy, all that is required of an investor is the capital they put in.
Yields are an excellent example of where Fi-To-Let outperforms BTL. Coventry, for example, has an average rental yield of 4-6%, with the CV1 postcode area producing 6.9%. With cash on top, Novyy's effective return on investment might range from 12 to 18%. Not only does this double or triple a high-ranking rental yield in BTL, but you as an investor will also benefit from capital gains as property values rise.
Fi-To-Let is the future of property investing, providing investors with ease of choice and substantial profits that will permanently revolutionise the BTL market. 2023 is building up to be another spectacular year for real estate, and our Fi-To-Let strategy is poised to assist investors in reaping the benefits of property growth.
About UsNovyy is an investment platform designed to facilitate private market investing for individuals and family offices globally who wish to invest in the British Buy-To-Let market. Our platform offers access to curated real estate opportunities with a focus on Co-Living segment via SFRs (Single Family Residences) and HMOs (Houses in Multiple Occupation / Multi Family Residences) by aggregating individual demand through a SPV (Special Purpose Vehicle) / feeder fund structure that invests directly into the underlying target assets. Every asset is levered with lender finance as well. We also offer secondary market investment, portfolio-level reporting, simplified annual tax reports and proprietary research, thereby enabling individual investors to access private market real estate transactions with lower barriers to entry.