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Rising rents, increasing tenant numbers and capital growth – there’s rarely been a better time to be a buy-to-let landlord

February 28, 2014Article by Ray Withers

The importance of a balanced investment portfolio cannot be overstated. For me, one of the most exciting aspects of such a portfolio is regular rental property income especially when I have a new young son to think about. Nappies, clothes, shoes, nursery let alone the foreseeable driving lessons and university fees – it all adds up!

With private rented housing having increased dramatically over recent years, so that it now accounts for 16.5% of all households (around 3.8 million homes in England, according to the Department for Communities and Local Government), buying-to-let is one of the most dynamic and interesting ways in which investors can be involved in the UK property market.

Growing demand

The Confederation of British Industry estimates that the UK’s private rented sector will continue to experience strong growth, accounting for 20% of all households by 2018. The figure comes on the back of the census data released at the end of 2012, which showed that the sector had experienced growth of almost 50% in the decade to 2011. With buy-to-let mortgages currently available at impressively low rates, many investors are examining the rental incomes that they can expect from this market.

A cut above

For me, high yielding rental investments are an attractive, long-term investment option. As at January 2014, according to the latest buy-to-let index from LSL Property Services, gross rental yields on a typical UK property stand at 5.2% but, as our investors know, Property Frontiers has never been satisfied with being ‘average!’

I’m proud that Property Frontiers is once again at the forefront of the market when it comes to buy-to-let investment opportunities. We are currently offering both prime waterfront apartments in Liverpool, with 8.5% gross yield guaranteed in year one, and luxury city centre apartments in Bradford, with a 9% return on capital and an insured deposit.

It just keeps getting better

The UK’s buy-to-let market is booming in large part due to the lack of available housing in the UK. Demand is outstripping supply and leading to steeply rising prices, which has pushed many properties out of would-be buyers’ reach. Turning to the private rented sector instead, these tenants are looking for stability and long-term rental options, creating the perfect environment for buy-to-let landlords.

The news for 2014 is also positive in terms of rental rates. According to the latest LSL landlord sentiment survey, rental rises of 3.7% are likely over the coming year. Currently, according to LSL’s buy-to-let index data, average rents are rising at a rate of 1.5% per annum, so the 3.7% represents a marked increase, with landlords benefitting accordingly.

Of course, all of this is set against a backdrop of rising property prices in the UK. With Halifax reporting price rises of 6.9% over 2013 and Savills predicting price rises of 25% by 2018, capital appreciation is the icing on the cake for many buy-to-let landlords.

Looking forward

Identifying where the next high yielding rental income opportunities are going to crop up is a key part of my work. It’s how I ensure that Property Frontiers’ investors remain at the forefront of the market. At the moment, this means keeping a very close eye on a certain development in Birmingham – watch this space for further details!

If you would like to know more about Property Frontiers’ high yielding buy-to-let opportunities, contact us today or sign up for our free newsletter to receive the latest market insights.


Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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