9 April 2012

Robin King, director, Move with Us, the residential property specialist, comments on today's figures from the Council of Mortgage Lenders which noted that the number of buy-to-let properties increased by 84,000 in 2011:

“The buy-to-let market is steadily expanding relative to other parts of the market, such as first-time buyers, but we believe it still has a way to go before we see another boom. We estimate that it needs to grow by around 50% over the next five years otherwise rents will escalate further.”

“The tightening of mortgage lending since the financial crisis has enabled professional landlords to step in and grab market share by taking advantage of lower property prices, reduced interest rates and the increase in tenants to rapidly expand their property portfolios.  In the current climate, investors should be looking for a rental yield of around 5%. To achieve this they need to work harder to attract the right tenants and to be able to demand high rents.

“Tenants are demanding higher quality homes with good amenities and transport links for very competitive prices and have the luxury of an increased number of properties to choose from. Professional landlords should be looking to invest in areas where we are likely to see high economic growth this year as higher property prices tend to follow. Areas with good rail links are becoming popular. Canterbury has a high-speed rail link where commuters can access London in under an hour, combined with being a history university city with good access to coastal areas and mainland Europe. The new HS2 planned line, although some way off, could also create good opportunities.”

 

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