Rental market enjoys rise in activity
With many people looking towards the UK property market to boost their income, news that the rental sector is booming will be welcomed.
The number of new tenancies taken out has risen 15% since this time last year, according to a report from Sequence, as people clamour to secure the property they want early in the year.
The average cost of rent has also increased by 8% annually and now stands at £758, while London rents appear to be fairly stable, only seeing a 1% rise, currently at £1,395.
Prices may be stable in the capital but the amount of tenancies taken on sees the most activity anywhere, reporting a 17% annual rise.
Taking advantage of this rental market is the savvy buy-to-let (BTL) investor, as the number of BTL mortgage applications increased by 17% annually.
The rise in property prices is fuelling the buy-to-let market with many looking at property portfolios to supplement their income. Whether you have just one property, or are a landlord to a range of buildings, the rental market can be a great way to enjoy attractive profits.
Retirees are another group looking at the property market as a way of generating income, with many seeing it as an alternative, or perhaps an additional, pension. With some people confused about pensions and the constant positive news about the housing market, many are increasingly trusting the BTL sector as a method of generating retirement income.
The rise in property prices is not such good news for first-time-buyers (FTBs) trying to get onto the housing ladder but, conversely, this is great news for landlords. As FTBs are priced out of the mortgage market they have no option but to rent, putting money into the pockets of the BTL investor. Others may make a lifestyle choice to rent, particularly if they require the flexibility to move about due to career choices.
Stephen Nation, head of lettings for Sequence, said: "The rental market across the country has started the year with renewed vigour and increasing levels of demand.”
"The good news is that buy-to-let remains the investment of choice across the UK, with the number of new mortgage applications increasing by 17% annually. This news comes in spite of the retraction of Funding for Lending to the mortgage market and highlights just how strong the market is. The pipeline of new investors we are seeing will continue the flow of properties onto the market and appease the demand, which should in turn, keep rents stable."
So, if you are looking to generate a profitable return on some savings, with bank rates remaining at an all-time low for such a long time, you may want to consider the BTL market.
Whether you are considering starting, or increasing, your property portfolio, why not allow us to compare some BTL mortgages to get the best deal for you?