With changes in regulations and harsher taxes from the government, many have been concerned about the buy to let investment market. However, in a recent survey, landlords themselves were asked what they though about their rental properties and the results were surprising.
In July 2018, confidence levels among buy-to-let landlords were the highest they had been for 18 months. Research from a BM Solutions/BDRC Landlords Panel showed that landlords were feeling good or very good about key indicators. When asked about their own letting business, there was an 8% increase in confidence from the previous year, showing landlords are confident in their investments. This increased confidence is good news for the economy in general, with the buy to let sector providing much needed accommodation. Investment in UK property is a key sign of confidence in the economy, as are new developments and home construction.
In general, landlords seem to be more optimistic about the future. Landlord confidence both in the UK economy and capital gains have increased by 3%. This could be due to a range of factors. Property values in areas like Manchester and Liverpool have been steadily increasing. Regeneration and investment in city centres has also lead to an increase in property values. Properties bought by landlords off plan or at below market value prices have been going up in value, so as well as rental yield, they are experiencing capital appreciation.
The demand for rental property is at an all-time high, with one fifth of the UK’s population now living in rental accommodation. In the East of England, there has been a huge increase in demand for rental property. Over the last three months demand for rental property has increased by 42%, so along with the highest rental yields in the country, landlords who own property in the east of England are enjoying success. In the West Midlands, rental demand was also up by a huge 33%. Young people are driving this demand for rental property. With mortgages still hard to obtain, high quality rental accommodation is a great investment opportunity.
The highest rental yields were found in Wales, which was 6.9% and the East of England, which was 6.7%. These areas where property prices are generally cheaper are providing great opportunities for investors to purchase buy-to-let property. Across the country, the average rental yield was 6.2% – which is the highest level since the end of 2014. With trends shifting towards increased rental yields, investors in buy-to-let property are making the most of new opportunities. In quarter 1 of 2018, over half of landlords felt good or very good about rental yields. Though on the whole, landlords are still cautious about acquiring lots of new properties, those in areas doing well are looking to invest again. 23% of landlords in the East Midlands are looking to expand their portfolios and 21% in the North East are too.
Investing in UK property remains a smart choice for many investors. Looking at areas is perhaps becoming more important when purchasing buy to let property. Property in areas with a huge increased demand for housing are far more likely to gain tenants and experience rental increases. Purchasing properties in up and coming areas with established companies like RW Invest provide investors with great opportunities for potential growth. Local knowledge and expertise about which areas will be increasing in value is highly important for potential investors in buy-to-let property. With landlords themselves confident about the future, it’s a good sign that despite new challenges, buy-to-let investment is worth it. Manchester Investment is at an all-time high and set to continue on an upwards trajectory.