Press Room
Rental Market Booming For Property Investors
With high levels of demand for rental homes across the UK, now could be the ideal time for property investors to add to their portfolios.
Stricter mortgage lending and the need for large deposits have left many households unable to get onto the property ladder, increasing yields for landlords in the private rented sector.
Recent figures from Paragon suggest that the trend is set to continue – four out of ten landlords polled by the mortgage specialist are confident tenant demand will continue to rise for the next 12 months.
In fact, 2011 has already proved to be a fruitful year for property investors – almost a third of landlords (29 per cent) have reported an increase in their rental income during the second quarter of this year.
Boosting their yields further, 13 per cent of buy-to-let investors were also able to increase rates across their portfolios by between two and four per cent. Landlords have been able to raise rents without pricing themselves out of the market due to growing demand.
Rent levels reached a record high in May following four consecutive months of increases, LSL Property Services has revealed.
The average rent in England and Wales was found to be £696 per month, a 0.5 per cent rise from the £692 average recorded in April. Overall, rents have experienced growth of 4.4 per cent compared to May 2010.
With rental yields rising, buy-to-let investment is becoming more and more popular. Many landlords are currently looking to expand their portfolios, according to Property and Finance Solutions.
Darren Owen, director of the investment firm, explained: "What we are tending to find is that the professional landlords are really looking to expand – they appreciate that it is a good time to buy and there are some cracking deals around."
Landlords are also becoming more involved with their rental homes – investors are now more "proactive" and prepared to a bit more work on their properties, he added.
Professional investors are looking towards larger properties and houses in multiple occupation (HMOs) to boost their income and may also be prepared to refurbish homes for the rental market.
With both demand for rental homes and landlord yields on the rise, now could be the perfect time to add another home to your portfolio or enter the world of buy-to-let property investment.
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Article date: 7/5/2011 12:00:00 AM