With savers continuing to receive poor returns from banks and building societies, thousands of people unsurprisingly continue to turn to residential property as a means of supplementing their income, supported by record-low mortgage borrowing rates, solid demand from tenants and stable yields, as buy-to-let consolidates itself as the investment of choice.
Despite a challenging 2018 for the buy-to-let market, characterised by tax and regulatory changes, investment in buy-to-let continues to outperform most major asset classes, as Britain’s rented sector continues to expand, with a sixth of the population – some 10 million people – now living in accommodation rented from private landlords, which is roughly double the volume recorded in 2000.
“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,” said Belvoir’s CEO Dorian Gonsalves.
Looking ahead to 2019, Belvoir 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% in some areas.
+ Good quality rental properties are still in high demand.
+ BTL 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 with higher yields.