The UK’s buy to let market is booming. More people than ever are living in privately rented accommodation, with up to five million households in the UK doing so. Three quarters of those renters occupy living spaces owned by private buy to let landlords. The number of renters in the UK is expected to rise to nearly six million over the next three years.
The market is perpetually ripe for further investment, and it has quickly become the backbone of the UK’s property market. Attracting attention and investment from both domestic and overseas investors, the UK buy to let market presents itself to many as something worth investing in.
But what are the actual benefits of becoming a private buy to let landlord? While recouping the costs and making a profit on your investment is the most important factor, there are plenty of other reasons as to why you should hedge your bets with buy to let…!
Buy To Let Demographics
In 2017, the total amount paid by renting tenants to landlords hit a record £51.6 billion; an increase of £1.8 billion on the outlay in 2016. That has more than doubled in a decade, with £22 billion being paid out as recently as 2007. Nearly 60% of that massive figure is from the millennial demographic, with £30.2 billion contributed by people between ages 25 and 34. Things have changed in the last few years, however, and more middle-aged people than ever are renting privately. People from that age range are twice as likely to rent as they were ten years ago. For investors, this means the market for tenants has expanded rapidly. The base for potential tenants is larger than ever. Which leads us nicely into our next point…
Ever Increasing Demand
Buy to let landlords in possession of a newly-available property, or any kind of occupational vacancy, will find themselves inundated with enquiries from potential tenants. Whether you own your own student property, a house, apartment or studio, the clamour for living space is such that an investor won’t be left empty-handed when it comes to trying to fill the property.
With the rapid growth of city centre living across the UK, with tenants looking for proximity to work and ease of access to leisure and entertainment facilities, owning the right property in a favourable location can mean a surfeit of eager enquiries from the get go.
The UK’s property market is always growing, and the latest figures show incredible growth for increasingly prosperous parts of the country.
The North West, helmed by Liverpool and Manchester, experienced incredible growth in the year up to August 2018. A surge of 5.6% in property prices in the region was well ahead of the national average of 3.1%. Properties in the area, such as those sold by leading property firms such as RW Invest, show signs of stable and continued growth. An investor who holds onto his property should see the value soar exponentially as these two cities reap the benefits of regeneration, investment, high student populations and rapidly increasing city centre populations.
High Rental Yields
This is the bread and butter of any buy to let property investment. Any privately-renting landlord should perform the necessary research before investing to see which areas across the country give the best returns.
There are plenty of places in the UK that are a book for investors looking to capitalise on low entry costs and high potential rental yields. Areas in Newscastle, Middlesbrough and Edinburgh are some of the best performing in the entire country, offering yields between 10.94% and 9.48%. An investor taking the plunge in markets not usually considered outside of London and other big players will find their investment is rewarded handsomely.
Regular Monthly Income
With property enjoying high capital appreciation and fantastic rental yields, the investor will be guaranteed a steady monthly income that will only ever increase. Allowing your investment to do the work for you is one of the big advantages of buy to let, and the benefits gleaned from following all this advice will be felt sooner rather than later.