Photo credit: McBeth
The UK buy-to-let sector celebrated its 15th birthday this weekend, as students return to university halls and landlords enjoy record rent prices.
Praised by The Paragon Group for its positive contribution to the UK housing market, buy-to-let was developed on 24th September 1996 at the RAC Club, Pall Mall, in response to the demand for rented property following the recession. After 15 years, buy-to-let investment is more popular than ever in the UK, and landlords are having their cake and eating it.
In August, demand for rented homes drove rents up by 1.2 per cent (the fastest rate this year) leaving UK tenants to face an average rent of £713 per month, according to LSL Property Services. In London, rents are now even higher, hitting a record monthly peak of £1,025 – £63 more than August last year. With 3.4 million rented homes across England, that’s a lot of income for smart investors, without taking into account the profitable buy-to-let markets abroad.
It's no surprise, then, that buyers are looking to join in the birthday celebrations. In the first half of this year, UK house builder Barratt reported a 25 per cent increase in sales to buy-to-let investors, while the Council of Mortgage Lenders and Paragon Mortgages found increased activity in the buy-to-let remortgage sector between the first and second quarter of 2011.
Ray Withers, Director of Property Frontiers, commented: Nowadays more and more people are choosing to live in rented accommodation, which in turn has been pushing up rental demand. This has of course pushed up confidence among buy-to-let investors and with rental prices rising, around 78 per cent of investors are now looking to buy additional properties.
Since buy-to-let's younger years, 2.1 million loans have been advanced while the value of buy-to-let balances has jumped from £5.4 billion in 1999 to £154.5 billion in 2011. As students return to university accommodation and graduates leave in search of their first rented homes, the UK is certainly a landlord's market, and buy-to-let investors will be celebrating more than just their 15th birthday.
Do you want to join the buy-to-let party?
Browse our listings of student accommodation, rented homes and other buy-to-let investments in the UK and overseas:
Related stuff from around the web:
A simple guide to what is a buy to let mortgage. Understand the basics of buy to let mortgages before you take the first step.
The average monthly rent is now £713 a month and further increases are on the cards, according to LSL Property Services.