1. It’s a buyer’s market
Mortgage interest rates are skyrocketing which is putting many people off investing in buy to let properties. However, if you do not need to take out a buy-to-let mortgage there has never been a better time to invest.
It really is a buyer’s market and there are deals to be had. Rightmove reported that asking prices fell by an average of £82 in June 2023 and Halifax’s latest report shows the largest fall in house prices since 2012.
Nationwide and Zoopla’s findings also supports this. Nationwide’s data shows that house prices have fallen by 1.1% in the last year. Zoopla has reported that houses are being discounted by an average of £14,100.
2. House prices will recover
House prices dip and rise over time, but they increase in the long-term. That’s why property has always been an attractive investment. Looking at historical data, house prices have risen by 70% in the last 10 years and by 143% since the year 2000.
But what is the medium-term forecast?
Leading property agent Savills predicts an increase in house prices across most of the country from 2026 onwards, with the greatest increases in the North and Wales.
Statistica and the Office for Budget Responsibility (OBR) also predict house prices will increase. Statistica predict growth of 1.7% between 2023 and 2027 and the OBR predict a 3.5% increase in 2027.
3. Rents have never been higher
Rents in the UK have never been higher and there are multiple reasons for this, but the main reason is that demand outstrips supply.
There is a shortage of housing stock, and this is not set to change. The population of the UK is growing, and predicted to increase by at least 30 million by 2035.
As mortgage interest rates increase, more first-time buyers are in need of rental housing because they cannot afford to step onto the property ladder.
From a buy-to-let investor’s perspective, this means attractive rental yields. If you buy a house for £200,000 and rent it for £1000 PCM, that’s a 6% yield.
Over a 15-year period, the rent will have paid you back most of the original purchase price.
4. No more void periods
Due to the shortage of rental properties in the UK, the length of time properties are lying empty is decreasing. In 2022 the average void period was 2.6 days less than in 2021, with the cost to landlords decreasing by 7.4%.
The shortage of rental properties also means you can choose the type of tenant that best suits your business goals, property type and location. For instance, are you looking for students, young professionals, or families?
5. You don’t need to worry about a tenant not paying rent
Worry about tenants not paying rent is often what keeps landlords awake at night.
However, you can negate the risk of a tenant not paying the rent by taking out Rent and Legal Cover Guarantee. At Rockett Home Rentals we include this as standard in all our managed lets.
Investing in buy to let – there has never been a better time
High rental yields, relatively low purchase prices, and the predicted increases in property values means there has never been a better time to consider investing in buy to let if you are a cash buyer.
At Rockett Home Rentals we can help you to maximise your investment. Unlike most other letting agents, we will not charge you every time there is a change of tenant. Instead, we charge an annual, transparent fee with no hidden costs.
We take pride in supporting our landlords, and we can promise you exceptional customer service that exceeds your expectations.
To discuss being one of our managed landlords, please call our friendly team on 01782 638111