With the predicted
shock of Brexit so far not having a major impact on the UK property market the
outlook for buy to let is not looking too bad with the lowest ever interest
rates a potential boost.
So it is interesting to see that most landlords in the UK still consider renting out a property to be a part time activity and the majority own just one property and manage their portfolio as private individuals.
Indeed, the research commissioned by the Council of Mortgage Lenders (CML) found that rents make up less than half of a landlord's total income. But it is important to also note that there is evidence that rent is increasingly becoming a significant income stream for part time landlords.
And while most landlords still own just one property, there is an apparent trend towards larger portfolios. Between 2010 and 2016, the proportion who manage only one property fell from 78% to 63%. At the same time, the share managing two to four properties rose from 17% to 30%.
This does reinforce that part time landlords are an important part of the private rented sector in the UK and we all know those seeking to increase their portfolios have had a hard time with the extra 3% stamp duty surcharge being imposed in April and tax relief changes on the horizon.
With the current lack of housing to buy the rental sector is going to remain significant for some time and specialist lenders have been increasing the number of buy to let products available. But jumping into a buy to let portfolio needs careful consideration at a time when rental growth is slowing.
The latest lettings index from Countrywide, for example, shows that rents in London fell by 0.5% in July compared to the same month in 2015 but they increased across the UK by 1.5%, the latest index shows.
It is important to realise that there are considerable regional variations and the drop in London was the first annual fall in rents for six years and in the North of England and the Midlands the rate of rental growth hit the highest level for two years.
The most up to date index from HomeLet also shows rents still rising but this growth is slowing. In London rents were up 4% year on year and excluding the capital up 2.3%. The index report suggests that the outlook remains strong despite the growth slowing. It even adds that landlords have been able to continue securing higher rents on new tenancies.
On top of this the student rental market has been given a complete revamp in recent years with the latest research naming Edinburgh, Bristol and Brighton as the best university cities to invest in student property in the UK, with Oxford further down the list in fifth place and Cambridge seventh.
Looking forward, the fundamental forces in the private rental sector remain unchanged despite Brexit and key fundamentals could well keep it rosy, including Britain's growing population, the relative unaffordability of house prices, and the lack of new homes being built combined with the reduction in social housing.
So it is interesting to see that most landlords in the UK still consider renting out a property to be a part time activity and the majority own just one property and manage their portfolio as private individuals.
Indeed, the research commissioned by the Council of Mortgage Lenders (CML) found that rents make up less than half of a landlord's total income. But it is important to also note that there is evidence that rent is increasingly becoming a significant income stream for part time landlords.
And while most landlords still own just one property, there is an apparent trend towards larger portfolios. Between 2010 and 2016, the proportion who manage only one property fell from 78% to 63%. At the same time, the share managing two to four properties rose from 17% to 30%.
This does reinforce that part time landlords are an important part of the private rented sector in the UK and we all know those seeking to increase their portfolios have had a hard time with the extra 3% stamp duty surcharge being imposed in April and tax relief changes on the horizon.
With the current lack of housing to buy the rental sector is going to remain significant for some time and specialist lenders have been increasing the number of buy to let products available. But jumping into a buy to let portfolio needs careful consideration at a time when rental growth is slowing.
The latest lettings index from Countrywide, for example, shows that rents in London fell by 0.5% in July compared to the same month in 2015 but they increased across the UK by 1.5%, the latest index shows.
It is important to realise that there are considerable regional variations and the drop in London was the first annual fall in rents for six years and in the North of England and the Midlands the rate of rental growth hit the highest level for two years.
The most up to date index from HomeLet also shows rents still rising but this growth is slowing. In London rents were up 4% year on year and excluding the capital up 2.3%. The index report suggests that the outlook remains strong despite the growth slowing. It even adds that landlords have been able to continue securing higher rents on new tenancies.
On top of this the student rental market has been given a complete revamp in recent years with the latest research naming Edinburgh, Bristol and Brighton as the best university cities to invest in student property in the UK, with Oxford further down the list in fifth place and Cambridge seventh.
Looking forward, the fundamental forces in the private rental sector remain unchanged despite Brexit and key fundamentals could well keep it rosy, including Britain's growing population, the relative unaffordability of house prices, and the lack of new homes being built combined with the reduction in social housing.
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