Buy-to-let overview - positive figures
Buy-to-let overview: positive figures
New research has found that growth in the buy-to-let market remained robust in the second quarter of 2015, with 43% of landlords experiencing a rise in tenant demand - a trend that has occurred for the past three consecutive quarters, according to figures from Paragon Mortgages. Frequently offering higher investment rewards than currently available through stocks, shares, traditional pensions and cash ISAs, the buy-to-let market continues to become a mainstream investment option.
This level of growth is expected to continue over the next year, with 51% of landlords believing that demand will continue to rise. The specialist mortgage lender also identified that over half of the landlords questioned were renting to young couples (47%), young singles (43%) and families with children (42%) - a fascinating insight into the rental mix.
In London, the news is exceedingly positive. The most recent HomeLet Rental Index reported that between May 2015 and June 2015, average rental values in the capital increased by 3.7% (£1,561pcm compared to £1,506pcm). Year on year, rents in London were 10.6% higher in June 2015, compared to June 2014, whilst average rentals in London (£1,561) were 105.7% higher than the rest of the UK (£759).
The popularity of buy-to-let has been further illustrated by new research from Kreston Reeves, who found the number of buy-to-lets has doubled in the last 18 years. In fact, it claims one in five houses are now owned by a private landlord, a figure expected to rise to one in three by 2032.
There has also been a resurgence of lenders in the buy-to-let market, with enticing products even for first-time landlords. Data analysts at Moneyfacts recently revealed there are 40% more buy-to-let mortgage deals for novice landlords today than there were two years ago, with a 13% rise in product numbers coming as recently as in the last three months.
Daniel Epstein, at TK International, concurs that buying a property for sale in Central London with letting in mind, or renting out a current residence is an attractive proposition: "You have changes to pension pots that allow over 55s to withdraw lumps sums, cash ISAs returning a poor rate between 1% and 2%, and returns on houses and flats to rent in Hampstead between 3% and 4%. when combines, it's clear that buy-to-let makes for a sensible savings strategy. We're finding that flats to rent in Hampstead with one-, two- or three-bedrooms are letting the quickest and with the best returns. Whilst the Chancellor’s emergency budget in July brought a reduction on mortgage interest tax relief from 2017, the effect of this will take some time and we do not anticipate it that it will impact the long -term benefits of the lettings market in London. We're happy to advise existing landlords and would-be property investors on how they can maximise returns, build a portfolio and plan for future lettings changes.”
If you would like advice on the London rental market, as well as a selection of properties for sale in Hampstead and the locale and that would be suitable as buy-to-lets, please contact TK International today.
Image source: The Guardian
