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UK’s Buy-to-let Investors Turn to Crypto in Hunt for Gains
The UK’s buy-to-let investors are increasingly turning to Bitcoin instead of bricks and mortar as they seek out more appealing returns.
According to an article in FT Adviser, people who’ve traditionally invested in property are transferring assets to crypto as the property market slows down.
The article cites increasing regulatory barriers, the high level of initial investment required and decreasing returns as the main reasons investors are moving away from property.
Other deterrents include Government reforms such as a 3 per cent stamp duty surcharge, and increasingly strict affordability tests, which have been introduced in the past 5 years.
Buy-to-let investors involved in the London market have been particularly hard hit, with the average investor needing around £250,000 up front to secure a three-bedroom flat.
This includes a £200,000 deposit, plus solicitor’s fees, stamp duty and the additional surcharge. Additionally, many properties need renovating before they can be release to the open market.
As a result, those who would have traditionally invested in property are now turning to Bitcoin and other cryptocurrencies to maximise their returns, especially given the performance of the digital currency market compared to property.
However, crypto regulation is increasing, and some critics have pointed to the fact that Capital Gains Tax and other taxes levied on crypto could put a major dent in any returns.
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