While millions grapple with the cost-of-living crisis and the Bank of England makes their expected interest rate hike early in August, just like in every other prevalent sector in today’s property market, landlord activity appears to remain unwavering.
According to the recent data reports, online searches on behalf of portfolio landlords saw an increase by 21%, while searches for consumer buy-to-let mortgages grew by 7%, with ‘Holiday let’ and ‘Air BnB’ being amongst the most common criteria points.
Increased interest in buy-to-let finance
Although the rental market was expected to cool down on the heels of changing government legislation, Google reported a 34% increase in searches for ‘buy-to-let’ finances between H2/21 and H1/22.
This could be explained by a growing pool of savvy brokers and their landlord clients making the fast decision to re-mortgage at a better rate to adjust their budgets to the worsening economic conditions.
Another contributing factor may be new landlords entering the market with plans to capitalise on the increased demand for rental properties and the yield available from this.
New opportunities for first-time landlords
The cost-of-living crisis has created a vast number of long-term tenants, as saving for a deposit takes a back seat for the time being.
Additionally, recent statistics suggest that the UK average rent has increased by 8% over the past year. With The East Midlands seeing the largest increase in rent at 4.3%, followed closely by the North West at 4%.
In the last five years, private rental prices have increased by 11.9% in the West Midlands, and 7.2% since the start of the pandemic. The mix of high demand and fruitful yields has made the sector an attractive investment opportunity for new landlords.
With property investment continuing to outperform many major asset classes and the continuous expansion of the sector, buy-to-let property is consolidating itself as the investment of choice in the UK.
Benefits for those who act now
With the imbalance of supply and demand underpinning a rise of inflation, UK landlords
are reaping the advantages of getting their foot in the door during a time of peak buoyancy.
As the average property price increases, future sale prices grow, meaning a buy-to-rent asset increases in value over time.
The rental growth caused by current rampant demand is a huge driving factor behind many people choosing to delay taking out a mortgage until supply picks back up, making rental accommodation a highly popular choice and landlords are more likely to obtain long term tenants. Becoming a landlord in today’s climate allows the investor to generate capital growth as their yield grows while the property value increases.
How landlords are staying on top of economic changes
Challenging economic conditions, including rising energy bills and high fuel prices, mean it’s important for landlords to keep their monthly costs down. If you’re thinking of becoming a new landlord, here are some tips:
Get a range of quotes for any maintenance work – Putting in extra time and research will help you find reliable and affordable tradespeople to work with.
Build a relationship and communicate regularly with tenants – Staying on top of any issues such as late rent payments or unpaid bills can help you to minimise their impact.
Inspect your property regularly – Responding fast to small problems before they escalate can ensure you big savings on costly repairs.
Work with a specialist property investment agent – Their expertise in the market and strong relationships could save you a significant amount of money.
Thinking of becoming a landlord? Contact our dedicated investment team today to start your journey.
