Are Buy-To-Let Properties Still a Good Investment for Landlords?

What are the predictions for the medium to long-term for the Rental Market?

Over the past few years the Buy-To- Let market has generally produced a good return for Landlords. (A dip was experienced in some areas in 2008 when properties To Let exceeded market demands.)    It is reported that 15% of the population now rent privately in the UK.  High property prices and deposits make renting the only option for an increasing number of young people.  Indeed, ‘first time’ renters are now reported to be in their late twenties and thirties, this is likely due to the restrictions’ of student debt and lack of employment.

Of course, there are contributory factors to the yield Landlords can expect to receive with the type of property and area of particular significance. The Property Guardian however, predicts an increase of 18% in rent over the next five years.  Whilst London, the South East and South West have seen rents increase over the past five years, for 2011-2012 the average rent has remained unchanged.

Whilst the current economic situation and lack of affordable housing means that Buy-To- Let remains an attractive investment proposition for Landlords, rents will only be affordable if they reflect the economic situation, for example, inflation and wages.  (For many, household bills as well as rent now account for the majority of earnings.)  Predictions suggest that rents will remain largely unchanged for 2013 therefore.

For Landlords, it is important to consider where they invest in property to achieve the highest returns and consider factors such as employment rates in the area. The Money Observer suggests that there is a good rental return for properties in the North of England (5-6%) for example, compared to a typical 2% in London.

With demand for rental properties remaining high, affordable properties available for Landlords and a potential good rental yield, Buy-To-Let remains an attractive prospect for investment for the medium to long term for Landlords.

Sources:  Money Observer   Property Guardian      Property Hawk    Belvoir! Letting