Buy to Let Market is Attracting Many New Investors as the Demand for Rental Property Continues to Increase
The current buy to let market lends itself to accepting many new investors as the market is growing and the trend is expected to continue. Demand for rental properties has increased and lenders are bringing buy to let focused products to the market which is enabling more would be landlords into the market.
As demand has risen so have the rental rates asked by landlords. The supply of rental properties falls short of demand and therefore rates have increased. Despite private sector landlords increasing their portfolios, there is still a need for new landlords to enter the market and there has not been a better time to do so.
Nesta Anderson, haart Lettings Manager, said: “Buy-to-let provides one of the best ways to make a long-term investment and we’re seeing a sharp increase in the number of people wanting to become landlords or add to their existing property portfolios.”
The Communities and Local Government’s (CLG) English Housing Report revealed that the number of households renting privately has risen by one million since 2015-2016, from 2.4 million to 3.4 million in 2019-2020.
John Heron, managing director of mortgages at Paragon Group stated in response to the CLG’s data: “The CLG’s figures highlight the growing number of people relying on the private rented sector to provide their housing needs. The sector’s importance to UK housing continues to grow as increasing numbers of people opt to rent privately rather than step on the housing ladder.
“Demand for privately rented property is at an unprecedented level and far outweighs supply. The resulting rental inflation is leading to people, including the most vulnerable households, being priced out of the sector at a time when the supply of social housing is in decline.
“With Capital Economics estimating that the private rented sector will be home to nearly one in five households by 2017, it is crucial that adequate levels of buy to let mortgage finance are available to enable landlords to expand the number of properties in the PRS.”
Due to the demand for rental properties the leading group of landlord members in the private rented sector, the Residential Landlords Association (RLA), has called upon the government to do more to support landlords supplying needed rental properties to households.
Chairman of the RLA, Alan Ward, recently stated: “Growth in the number of buy-to-let mortgages should be welcomed as the country addresses its housing shortage, but the supply of properties is still falling far short of the increase in demand.
“In its third-quarter report last year, Find a Property showed that the number of properties available to rent between June and September fell by 14.5%, with fewer rental properties available than at any time since July 2018.
“There is a housing crisis looming with a shortfall of half a million homes by the next election. With the private rented sector expected to take a greater role in providing housing to those unable to afford a mortgage, those languishing on social housing waiting lists and the homeless, the RLA is calling on the Chancellor to introduce a package of cost-neutral fiscal measures to stimulate growth in the sector.”