Buy To Let
Buy to Let | What Does the Future Hold for Property Investors?
Buy to let has represented a sound investment for quite some time, at least for those who are in it for the long haul. The Association of Residential Letting Agents (ARLA) stated in 2007 that there were two million households in the private rental sector in the UK. That represents a large market for prospective buy to let landlords.
Student debt and the rising age of first time buyers means many graduates leave university with debts of around £10,000, hampering their chances of buying a home straight away. This has an obvious impact on the buy to let sectors, as they are likely to be renting for longer.
In recent times, the average age of the first time buyer has increased from 29 to 33, which means this group is staying in the rental sector longer. And there are a number of people with children, who are still living at home, effectively renting space from their own parents.
At the other end of the scale, and also contributing to the boom in buy-to-let, is a generation of parents who want to make sure that their university-age children have suitable accommodation. So there are many parents who take their first steps into buy to let when their children go to university, buying a property which they let to their child and some other students. This has some advantages from the point of view of property management and may also provide a long term buy to let investment. Many parents get to buy to let bug and continue to invest in property long after their children have graduated.
BTL Sector
The buy to let sector is very varied, with available properties of every type in every area of the country. These may include holiday cottages in popular national destinations or diplomats' residences in the heart of London as well as the flats and small houses that are the backbone of the buy 2 let market. ARLA suggests that half of all buy to let rentals are arranged through letting agents, with many of those members of recognised professional bodies.
According to ARLA in January 2007, two thirds of the letting agents in prime central London report they have more tenants than there are properties available to rent. This is echoed throughout the South East, where the same lack of property is reported by 57% of the letting agents. In the rest of the country, 37% are reporting rental property shortages. This means demand exceeds supply, making it an attractive proposition for new and existing landlords.
At the moment, the outlook is for continued growth in BTL. This will be driven by a number of factors. One of these is an increase in the number of workplaces offering flexible working. With people no longer tied to an office, it may become the norm for them to work from home and have a rented property near the office for the times when they need to be there. Many people who work in expensive areas already do this. The need for more student accommodation is also expected to contribute to the continued growth of buy to let.
