Buy To Let
Exciting, dynamic and an abundance of opportunities - yes, we are talking about the UK buy-to-let property market. Underneath the constant negative press, the uncertainty of Brexit, and the rise and fall of the pound, there is a vibrant market that continues to attract investors such as yourself from all over the world. Growth in the number of buy-to-let investors with a mortgage has estimated to have risen by 95% over the last five years.
Many investors are taking advantage of developments outside London, including those in thriving northern cities such as Manchester, Leeds and Liverpool. Offering solid capital growth and strong yields, these areas are alive, thanks to inward investment and their ability to attract new business and global corporations.
Manchester has been voted the most desirable city to live in the UK. Its rental growth is 13 times faster than London, it has a world-class economy, and is "the UK's best city for property investment" as stated by HSBC - it's no wonder that Manchester is rivalling London when it comes to attracting overseas investors. This city is expected to outperform over the next five years, as are other economically active markets.
Chinese enquiries for UK property climbed by 12.2% this September according to the Chinese listings website Juwai, and when compared to the same month last year, it is up by 90%.
Bernie Morris, EMEA president of Juwai.com, told The Telegraph in October, "We expect London's share of total investment to decline gradually as Manchester and other cities become more successful at attracting Chinese buyers." That's not to say that there are not challenges; the economy is forecast to slow down, although the Treasury recently predicted that in 2017 it would grow by 0.9%. Landlords made nearly £180bn in capital gains since 2009 according to property firm Savills. Other research suggests that returns from rental income and price growth has hit 8% over the last 12 months in some areas of the UK.
It is also predicted that there will be an increased demand for properties to let over the coming months, which could see a boost in rental prices.
Recent government changes intended to dampen the buy-to-let market, such as the stamp duty surcharge, seem not to have had the desired effect, as investors instead look for yields in cheaper areas of the country, which tend to be higher.
Further evidence of the growth in the buy-to-let sector has been released by the UK's number one property portal, Rightmove, whose recent survey results reveal that between June and September this year, enquiries from would-be investors increased by 30%. "Investor activity has bounced back following the stamp duty changes, though some agents report that many are looking to knock sellers down on their asking prices to make up for the additional stamp duty they now need to pay," states Sam Mitchell, Head of Lettings for Rightmove.
Growth in the sector can also be seen in data released by mortgage lenders. Mortgage lending to buy-to-let investors accounted for 4% of total mortgage lending in 2000, whereas this had risen to 16% by the second quarter of 2015.
There are many regional market fluctuations; our team at The Property Supplier can present you with the right investments for your portfolio.