BUY TO LET MARKET SET TO BOOM IN THE NEXT SEVEN YEARS
In a recent piece of research by Hamptons it has been forecast that the private rented sector will have a big surge in demand in the next 7 years. It has been forecasted that 6 million households will be living in renting accommodation by 2025.
This has been predicted despite increases in stamp duty and landlord tax changes which clearly hasn’t slowed down investors purchasing. The prediction has arisen from the number of households renting increasing between 2017 and 2018 by 164,000 which is 3% more than 2016.
It seems the UK is set to become more like Germany with more and more people renting and it being much less important for people to actually ow their own home.
The research by Hamptons also shows that cash purchases is also on the rise, probably because of the changes in tax relief on mortgages. 65% of investor purchases were with cash in 2017.
Strong house price growth in the last few years has resulted in lower yields for many new buyers, however, clever purchasing still means good yields and capital growth are still out there for grabs. The yields in London are averaging at 5.4% compared to 7.9% in the North West but London landlords often achieve higher individual yields due to tactical buying in particular locations with huge demand.
Finally, the research also showed that those landlords who sold in 2017 made a gross return of 69% over 8.5 years. 60% of this was rental return and 40% was capital gain.
If you are looking to dip your toe in a buy to let or looking to expand your portfolio and would like some advice then please contact Thomas Miller or Laura Fiddes-Baron on 0121 445 7410 or email Thomas@oulsnamlettings.net.