Hello to everyone and a happy new year. 2021 was a year that started in lockdown in the UK and many parts of Europe and ended with uncertainty. Interest rates were hiked from .25% to .5%, still historically low albeit done to offset inflationary pressure. Buy to let yields are still holding up 5-12% in much of the country and the property market remains historically buoyant, with 12% of the UK’s houses sold in 2021. The buy to let market still remains strong and with pressures to energy and tax rises likely a short term phonemonon, Reddbox believes abandoning property too soon would be jumping the gun. Insurance premiums won’t increase, although a change to the law will make it appear as though they will. We explain why below.
Buy To Let Regulation and Taxing The push towards the mandatory band C certification for household energy usage has priced some marginal landlords out of the buy to let sector, leading to the sale 0f 13% of rentals in 2021. Speculation over a rise in the surcharge made rounds but ultimately did not occur. This was largely due to the landlords that used BTL properties as a way to generate short term income rather than longer term cash for savings and retirement.
Buy To Let as a Retirement Plan A PlanMortgage advisor from Sheffield has prepared a four-year savings plan that will allow him to retire at the end of 2023, documenting his progress here. He ties up a significant sum in buy to lets to generate a passive income for when he quits his job and starts a new venture of his own. Reddbox welcomes the interest in the buy to let market as well as financial prudence. His key is diversification and a low interest only mortgage. He also aims to purchase more properties to diversify within the BTL sector as well.
Insurance Premiums – The End of the Loyalty Penalty
Up until now, insurance plans were priced competitively low in the first year following the advent of price comparison websites in order to attract new customers, until the premiums were hiked for the second year onwards. Loyalty was penalized, and customers were incentivized to find another insurance provider, the practice being hailed ‘price walking’. This meant potentially searching for a new provider of home or car insurance every year in order to save.
In December 2021, the government announced that premiums are not allowed to be increased without the customer posing a higher risk, i.e. a claim following an accident. This means companies can no longer earn money off their customer’s loyalty, leaving companies having to resort to other means to prevent losing customers. Spending vouchers are one solution used in other industries.
Reddbox is also launching new insurance products later in this month, so you can take out insurance, manage your plans, and streamline your property management all in one app.
Our offer: Download the app and start saving time managing your properties. Follow the screens to provide your details, and that’s it. Some of the key features why you should consider Reddbox are –
- A completely app-based, super simple service booking process.
- Options to pay for the service over a few months without any additional interest or fee. See our rates here. Be quick, we are running promotional rates at the moment.
- You can book the service seven days a week, which means no need to disrupt your busy day.
- A very transparent cancellation and refund policy.
- And the best one – Reddbox will automatically organise all the relevant documents such as invoices and certificates.