New research has indicated that UK residential property has recorded impressive growth for investors throughout the past year. The Buy2Let Shop breaks down the key figures quoted in the report to determine what this means for potential buy-to-let landlords.
Various figures suggest that the buy-to-let market is now worth £112bn a year for landlords. That’s £67.2bn in capital gains, and £44.3bn from rent in the year to March 2015, an increase of £5.8bn from the same period last year.
The UK property market has seen a capital growth of 9% over the past 12 months, growing 2.7% in August from the previous month – the biggest growth since May 2014. Additionally to this, investors also average a yield of £700 every month.
In July 2015, prices paid by first-time buyers were 4.4% higher on average at the same period last year, according to the latest House Price Index. It is expected that the market will continue to rise, and by 2020 there will be around one in five households will be in rented properties – rising from 4.8m currently to 5.5m British homes.
Whilst supply of rental property continues to rise, it seems that there is still a huge imbalance between supply and demand. Martin Ellis, Halifax Housing Economist, believes this imbalance is a key factor. He said: “The underlying pace of house price growth is strong. The shortage of second-hand properties for sale on the market is resulting in upward pressure on house prices.
“House price growth in August hit its highest level in 16 months, as the number of homes being marketed fell to record low levels. Sellers are just not coming to the market and no-one really has an answer to how to tempt them back.”
Rent prices also continue to rise, with markets particularly in London and the South East seeing a rising demand. Rent has seen the highest rise since autumn 2013, with landlords receiving almost £4bn every month.
Buy2Let Shop are the UKs leading estate agent for investment grade property and along with our sister company “The Buy2Live Shop” we offer professional and friendly services to vendors looking to sell their home to investors looking to build their portfolio.
Through our national advertising campaigns and huge network of contacts, we connect buyers with sellers and unlike most high street estate agents, we not only have a large number of listed buyers looking for find their dream home, we also have a database of retained investors, with proof of funds and finance in place.