A secure and attractive return!
Over recent years there has been a mini buy-to-let boom.
With millions of people unable to buy homes due to strict mortgage criteria,
the demand for rental property has increased sharply. This has pushed up rents
and now many landlords are generating excellent returns and looking to expand
their portfolios.
Here, we look at how property can give you a secure return
and why landlords are increasing their income from property year on year.
A new survey of landlords in England and Wales has found
that around 41% have increased rents over the past 12 months, while just 7%
have lowered them.
Market research agency BDRC Continental and property
consultancy Allsop LLP interviewed a total of 1,536 landlords in England and
Wales over the six months to March 2013. Of these, 87% are achieving the asking
rent or higher while almost a quarter (23%) intend to buy further property in
the next year.
The survey also found that, excluding London, the average
monthly rent for a two-bedroom flat is highest in the South East, at £695 per
month. Rents are lowest in the North East at £480 per month.
The average monthly rent for a two-bedroom flat in London
zones 1-2 is £1,515 and £1,060 in Zones 3-6. For a three-bedroom property, the
average is £1,815 in zones 1-2 and £1,435 in zones 3-6.
Allsop LLP partner Paul Winstanley says: "The demand
for rented housing and the constraints on the wider housing market mean that
rented housing is likely to retain the same income dynamics for the medium to
long term. The rented sector is growing at such a rate that landlords will
share in a secure and attractive return."
Keith Osborne, editor of WhatHouse.co.uk, says: "With
buy-to-let mortgages readily available at competitive rates and rents
increasing annually it's no surprise that more and more people are being
attracted to property as an investment. Nearly nine in ten landlords are
achieving their target rent for their property and two in five have increased
their rental income in the last 12 months. When you compare this to the returns
available from traditional investments such as savings accounts, ISAs and shares,
it clearly represents a sound proposition.”
"According to the Council of Mortgage Lenders,
buy-to-let lending now accounts for 13.4% of all mortgages. Considering the
potential for great returns, I predict that this market will go from strength
to strength over the next few years."