Edifice Invest reveals what’s happening with the UK’s rental market and why now is the right time to invest in a Buy-To-Let Property.
In the latest figures revealed by The Guardian, the total amount of rent paid by tenants has doubled in the last decade, soaring to more than £50 billion in 2017 alone, with an increase of £1.8 billion than the year previous.
This dramatic change in the UK Property Market will soon mean the total rent bill will eclipse the entire sum paid out by homeowners for their mortgages, according to the UK’s biggest mortgage broker, Countrywide. In fact, the amount that home buyers are paying for their mortgages has fallen, from a peak of £63.8 billion in 2008 to £57.4 billion in 2017.
Over the same period, both the number of people renting and the amount of rent paid has increased. According to the English Housing Survey, it is estimated that an average tenant paid around £192 a week to their landlord in 2016-17. In London alone, private renting is now the most common form of tenure. With home ownership levels falling to 63% today (The Resolution Foundation, 2016), it is expected the private rental market will continue to remain buoyant.
As an investor, there is no better alternative than to invest in property. With more people than ever renting – over 46% of 25 – 34 year olds now live in private rentals compared to 27% in 2006-07, the amount of rent being paid increasing – £51.6 billion in rent compared to £22.6 billion in rent in 2007 and the rapid increase in house prices – annual house price growth is expected to be around 3% for 2018 (Halifax (2018), smart investors can benefit massively from Buy-To-Let investment.
Furthermore, investing in property is not a new strategy for investors. As a matter of fact, there are estimated to be around two million landlords in the UK who own around 5 million properties. Therefore, unlike other investments such as Shares or Bonds, Buy-To-Let investors benefit from double growth which is fuelled by a regular rental income and capital appreciation.
Unlike other investments such as Loan Notes or Bonds, you own the property outright which means along with a regular rental income, Buy-To-Let investors will benefit from capital appreciation too.
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