Being A Landlord Helps Future Proof Savings

Wednesday, January 14, 2015
Property Investment Still Regarded As Safest Way To Future Proof Savings

Property Investment Still Regarded As Safest Way To Future Proof Savings

Property Investment Still Regarded As Safest Way
For Landlords To Future Proof Savings

Property investors who are looking to become landlords may have a promising financial outlook ahead of them, thanks to continuing high tenant demand for rental properties in the UK private rented sector and the continued development of specialist products and services designed to maximise rental yields and protect rental income.

The UK’s housing market will always experience a number of cyclic peaks and troughs, but in the long-term, residential property prices will continue to rise, with some economic forecasters predicting a 30% increase in key areas over the next five years.

However, recent figures published by the Department for Communities and Local Government (CLG) reveal that residential property ownership in the UK is at its lowest level since 1988 with only 14 Million people owning their own home, dropping by 5% in the last 10 years.

Further declines in home ownership is expected to continue falling as the UK edges further towards the same way of living as our continental neighbours.

Eurostat, the official statistics bureau of the European Union (EU) reported in that in 2013, the average proportion of residential property owners within EU countries was around 70%, the same level the UK was at in 2005.

However, the latest data shows that the UK now has one of the lowest property ownership levels in Europe, with only 64.7% of occupants owning their own homes and 2.5 million properties being rented by tenants.

The UK private rental sector has become increasingly attractive to property investors, with more Buy To Let mortgages being launched by lenders and the continued development of a wide range of useful products and services being made available to landlords.Demand for rental properties remains high. In the three months to September 2014, average rental values for new tenancies in the UK’s private rental sector were 8.2% higher than the same period in the previous year, with up to seven tenants chasing each available rental property.

According to data published by HomeLet, a rental property in London is typically let for £1,413 (GBP), around 49% of the average income in the city, compared to 47% for Edinburgh – approx £700 (GBP) and Birmingham – £550 (GBP).

The most affordable city in the UK was Plymouth, with the average £510 (GBP) rent accounting for only 27% of a tenant’s average annual income.

Away from London, PRS rents have risen in the North East and the East Midlands with research also suggesting that Southampton, Manchester and Nottingham are good places for landlords to purchase properties using buy to let mortgages.

Sim Sekhon

Sim Sekhon

Spokesman for Finance 4 Landlords, Sim Sekhon, said: “There has been a shift in  mindset about renting property, with people not owning their own home becoming increasingly acceptable. Prospective residential property owners may still find it difficult to get mortgages, thanks to the introduction of stricter affordability measures brought in under the Government’s Mortgage Market Review, launched in April 2014. However, UK landlords have a number of attractive buy to let mortgage options available, plus there is the added bonus that landlords can also protect their rental incomes with Rent Protection Insurance, should their tenants suffer an unexpected change in circumstances. The development of specialist insurance products such as Tenant Liability Insurance and Landlords Contents Insurance can also help- to protect the fabric of the rental property as well as the tenant’s deposit. The old adage that you can’t go wrong with bricks and mortar is certainly worth bearing in mind for landlords who want to future-proof their life savings.”

Buy To Let Mortgages Help Landlords Future Proof Savings

Buy To Let Mortgages Help Landlords Future Proof Savings

This was written by Mike Clarke. Posted on at 11:30 am. Filed under Buy To Let. Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.