Buy to let boom continues

The buy to let sector of the UK’s property market is set to continue its current boom according to new figures that have been recently released. A survey carried out by IRESS saw a 49% increase in buy-to-let mortgages from the 2015 survey which is the biggest increase in a yearly period since the surveys started five years ago.  This has been the case for some time as in 2000 buy-to-let accounted for 4% of mortgage lending compared to 16% in the second quarter of 2015.

HMO properties, in particular the student market in Brighton, has seen a change in demand due to universities Sussex and Brighton both increasing size continuously. Although many first years attain a place in newly built halls of residence, second and third years require housing in the private sector.

Overall the market may have slowed slightly due to Brexit as investors are unsure how the market will go, property prices have remained high as the supply has dipped with the demand. Many people are choosing to stay in rented property for the time being to see where the market goes, this breeds a very strong rental market as more people compete for the better properties. Perhaps everyone is waiting for a dip in price which may never come?

Investors in the buy-to-let sector have consistently seen excellent returns as the demand for rentals remains high. Between 2009 and the first half of 2015 landlords made nearly £180bn in capital gains, proving its not only profitable in rental yields but also from an increase in equity. Even with the new stamp duty taxes on buying investment properties, landlords have continued to invest as the rewards are so high.

This trend shows no sign of slowing down and with interest rates low, good lending products on the market and demand for rental property so high, now is as good a time as ever to invest.