Why landlords should be optimistic about the current buy-to-let market
- 16th August 2017
- Landlord Property News
Continued population growth and consistent long-term inflation-beating returns are just two of the many reasons why landlords should look to the future with optimism
With the summer peak renting season upon us, it is useful to reiterate the underlying strengths of the buy-to-let market in London, and why it is a strong long-term investment for both current and prospective landlords.
We have discussed elsewhere in this month’s newsletter that recent discussion and tilted commentary of the Government changes to buy-to-let have often ignored the positive long-term trends that work in landlords’ favours.
Read here where we discuss how current increasing competition in the buy-to-let mortgage arena is already benefiting landlords by offering increasingly lower rates.
Some of the other key reasons to remain optimistic about the buy-to-let market in London are clear to see -
• High tenant demand: added to an ever increasing population, especially in the capital
• Rising rent prices: while rents may have taken a bit of a dip recently, over the long-term for serious, professional landlords they offer consistent returns and a good hedge against inflation
• Diverse investment options: with no one uniform style of property, landlords can diversify their portfolio across a wide range of options, from studio apartments to detached houses and across different boroughs in London taking advantage of regeneration and new transport facilities
• Long-term returns: property consistently offers continued house price growth
• Steady income stream: Property provides landlords with a steady stream of money coming in, meaning that landlords benefit from not only overall capital growth, but also a regular income from the property. Buy-to-let consistently produces yields of 3.5% to 4% - outstripping inflation (currently at 2.6%) - and outperforms other assets on a risk adjusted return basis over 16 years, meaning it is potentially a less volatile investment
Stephen Ludlow, Chairman at ludlowthompson, comments: “There continues to be a fundamental mismatch between supply and demand.”
“Long-term completions of new build property do not satisfy first-time-buyer demand, meaning an extension of the time that ‘Generation Rent’ stays in rental accommodation. All of these developments mean continued positive, long-term trends for Landlords.
There continues to be a fundamental mismatch between supply and demand
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