Reasons for landlords to be cheerful – despite Brexit uncertainty
Buy-to-let remains a good investment despite Brexit uncertainty - provided buyers do their research prior to purchase, the latest analysis from Belvoir confirms.
The data, compiled for the UK lettings and estate agents by TV property expert Kate Faulkner, shows that fewer landlords are exiting the property market, eviction rates remain very low, and that franchisees forecast rental rises in 2019.
Dorian Gonsalves, Belvoir CEO, predicts that property will remain a good long-term investment for the following reasons:
- In a market with falling residential property transactions more people are likely to rent.
- Property values are still low in many areas and rental income is likely to increase in 2019.
- Rental yields remain good, ranging from 4.5 to 12 per cent in some areas.
- Good quality rental properties are still in high demand.
- Buy-to-let remains a good, solid long-term investment.
- Interest rates remain low, allowing investors to lock in low-cost financing, helping to support a stable long-term investment.
- Mortgage-free cash buyers are able to pick up some fantastic investment properties, including HMOs (Houses of Multiple Occupation) with higher yields.
Mr Gonsalves said. “We are still seeing landlords buying, but the numbers of properties are reduced, particularly those landlords buying six or more properties.
“According to HMRC statistics residential transactions were 8 per cent lower in Q3 2018 when compared to Q3 2017.
“In the past we have found that when people decide not to commit to property purchases, the demand for rental properties increases, which will typically lead to higher rents and higher yields for landlords.”
He advised those landlords who intend to expand their portfolios to consult a local specialist who know exactly which properties are in demand, and which properties are likely to have lengthier void periods.
Richard Truman, Head of Operations at Simple Landlords Insurance added: “Landlords have been feeling the pinch from all sorts of factors, including tax changes, tighter lending criteria and more regulation. Clearly many have an eye on Brexit – now looming large.
Mr Gonsalves said: “Whilst landlords are operating in an environment that is slightly more expensive and more tightly regulated, with over ten million renters in the UK we predict that property will remain the tenure of choice for many millions of people in the UK for a very long time.”