Demand for Buy To Let is Rising
Over the last few years, a storm of Government changes has affected the Buy-To-Let market and its investors. Changes such as the 3% stamp duty surcharge on second properties and the reduction in mortgage interest tax relief have meant many investors have turned away from this type of investment. However, as we have long suggested, the Buy-To-Let market is still very much growing and there is an increasing demand for rental properties from millennials.
David Smith of the Residential Landlords Association has said “young people and many families are being let down by the Government’s tax rises on private rented housing. While the number of first-time buyers is increasing, the reality is, young people are having to wait longer than ever to get on the property market.” Additionally, figures released by Halifax has shown that the average age for first-time buyers is now 31, two years older than a decade ago. It is clear the idea of living at home with mum and dad is very unattractive for many young people. Previously, the private rented housing allowed young people to move out and establish a place of their own but since the tax changes, there are very few rented properties available and supply is not keeping up with demand.
Whilst many young people would like to get on the property ladder, they are unable to do so and as house prices keep rising, we expect to see this trend continue. Currently, the average house price as released by Gov.uk in 2017, is in excess of £355,000 for a detached house in England with first-time buyers needing an average deposit of £33,000.
Therefore, it’s no surprise to see that owning your own property seems to be an impossible dream for most millennials. Areas like London have seen the average deposit needed jump 276% in the past decade to a staggering £100,445, according to Halifax, which simply isn’t feasible for a lot of people.
Consequently, demand for private rental properties is growing and current predictions by letting agent Knight Frank has suggested the sector will grow to one in four households renting privately by 2021, which is good news for Buy-To-Let investors.
So, if you’re an investor looking to take advantage of the increasing demand for rental properties, Edifice Invest can help! We are experts in off-plan developments with an extensive investment portfolio offering returns of up to 10-15% per cent per annum. Plus, you can rest assured that we have the experience and capability to deal with the developer and property management company too, to provide a fully ‘hands off’ investment.
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