Find out what’s happening in the property investment arena both in the UK and internationally
UK rental sector goes from strength to strength as it approaches the £1 trillion mark
June 12, 2015Article by Charlotte Ashton
The UK buy-to-let market has been expanding rapidly for several years, but now data from the Council of Mortgage Lenders has revealed that it is on course to hit the £1 trillion mark within the next 12 months.
The perfect portfolio
“The UK rental market offers investors the chance to build the perfect portfolio, with a huge range of high yielding properties spread up and down the country,” comments Ray Withers, Chief Executive of leading property investment specialists Property Frontiers.
It’s a chance that many have seized upon. Overseas buyers have been increasingly focussed on buy-to-let in the UK, while the country’s own landlord numbers have also swelled rapidly. Data from HM Revenue and Customs (HMRC) has shown a 40% rise in UK taxpayers declaring income from property in just five years, rising from 1.5 million in 2007/08 to 2.1 million in 2012/13.
Buy-to-let landlords claimed some £6.3 billion in tax relief during the 2012/13 financial year, according to the HMRC figures, with the tax concessions supporting the growth of the sector by improving yields.
The much-debated lack of new homes in the UK has pushed purchase prices up, particularly in popular city locations, while demand for high quality rental accommodation has also surged as a result. Property Frontiers’ Ray Withers continues,
“Tenants are queuing up to rent properties in the UK right now and the situation created by the lack of homes being built doesn’t seem to have a solution coming along anytime soon. For buy-to-let investors, this is great news, as it means demand will remain strong over many years of their investment.”
The situation has also led to rising rents, with the latest Buy-to-let index from Your Move and Reeds Rains showing rents in England and Wales in April 2015 to be up 4.6% on the previous April. The dataset also revealed an average gross rental yield of 5.1%.
In Salford Quays, Greater Manchester, yields well above this rate can be found by those with an eye for the right property. Apartments at the stunning Custom Quay waterside development, which are available from £127,000, offer an 8.4% expected yield, based on two independent market appraisals.
Of course, buy-to-let is also about capital growth, which is why a number of investors like the look of the south coast’s city of Brighton right now. The Park View Apartments, situated directly in front of Preston Park, are available from £330,000 to £420,000. With direct trains from Preston Park station to London in under an hour, Brighton is enjoying heightened demand for rental homes as Londoners abandon the capital in record numbers in search of a better quality of life on the coast: fantastic news for property investors looking to build a mixed portfolio of well-chosen apartments in order to enjoy the UK buy-to-let sector at its best.