Average rent prices are increasing virtually everywhere in the UK, according to recent reports. The House of Commons library rental figures indicate that prices have risen by as much as 11.5% in the last year – which is good news for people looking for buy-to-let property for sale.
27.4% Since Previous Election
According to the latest buy-to-let index from YourMove, rent in London has increased by 27.4% since the 2010 general election – a figure that has considerably outstripped the rate of inflation. Likewise, other areas have seen remarkable growth. In the South-East, rent prices have risen the highest since the start of 2015 – by 11.5%. The Midlands has also experienced notable growth – with rental prices in the East of the area rising by 5.9% and the West by 4.6%. The South-West of the UK is close behind, with growth of 4.5%.
In light of this, why aren’t more people interested in investing in property in the UK, rather than renting?
Rental Market Buoyancy – The Factors
The rental market continues to boom, regardless of rising rental prices. The reasons for this are:
• Initial investment. In spite of the government’s Help-to-Buy ISA scheme, finding the initial savings for a deposit is challenging – particularly for first-time buyers.
• Rising prices. House prices continue to rise, and without financial help from family, many people find themselves priced out of the market.
• Lifestyle. For some people, buying a house isn’t a practical solution – particularly if their job requires them to be flexible in terms of location.
As a result, the need for rental property is still high. To illustrate the point, on average there are 10 applicants per available room for rent in London!
Lucrative Property Investment (UK) – Set to Change?
When considering property investment (UK) and the potential of buying to let, it’s important to consider the long-term, to ensure your investment offers a good return. The future is always a concern when investing in buy-to-let property for sale – as ROI depends largely on continued need for rented accommodation in the area, not to mention good average rental yields.
However, Adrian Gill, the director of estate agents for YourMove and Reeds Rains, believes that landlords need not be concerned – and that the future of the rental market continues to look promising.
He states: “… in the longer term, faster rent rises may become a semi-permanent feature on the British property market. Alongside purchase prices, rents will continue to rise rapidly until something happens to address a drastic shortage of homes in the UK.”
Maximising Rental Profit
Many landlords, in a bid to increase annual yields and make renting more accessible, choose to convert their properties to HMO (house of multiple occupancy). Room sharing is a particularly attractive option to young professionals and students, who appreciate the reduced rent and sociable living arrangements – and of course, sub-dividing the property to allow for more tenants increases rental yield considerably.
Additionally, it’s a good idea to do your homework before making an investment. Look for an area that offers not just a high average rent, but where properties can be purchased at a competitive price (buying a house at auction is an effective way to secure a good deal). Identify a particular demographic to target, and choose a location and property that appeals directly to them. Attending a property investment seminar can help with this important process.
The Buy2Let Shop
If you’re considering buying a house at auction for buy-to-let purposes, or simply want to find out more about property investment opportunities in your area, talk to The Buy2Let Shop today. Our friendly, professional services help investors find suitable properties, and we also offer help with property auctions (UK). Additionally, our regular property investment seminars are designed to help investors gain familiarity with the market, and enjoy a better ROI. To find out more, simply visit our site today.