BTL rise in South East
- Published: Wednesday 16 January, 2013
- Category: Rental market
- By: Ben Gosling
- Updated: Monday 15 December, 2014
According to the 2011 census, the proportion of households renting in the UK has increased by 5% over the past decade. The proliferation of renting households across UK regions has also increased; more than 10% of homes are now rented in almost all local authorities, marking a considerable change from 2001.
Figures from Rightmove have shown that UK rents have risen by 13.6% since 2009. This is due to massive demand for rental property, which – along with static house prices and poorly performing investments – is triggering an increase of investment in buy to let.
The ‘boom’ is particularly pronounced in London and the South East, in some areas of which buy to let accounts for between 30% and 40% of all property sales. The Telegraph has named Victoria, Maidenhead, Cambridge and Canary Wharf among its ‘top 10 buy to let hotspots’ in 2013.
2012’s house price indices showed that this part of the country kept house prices afloat whilst many other areas pulled down the average. This, and demand for rental accommodation, has kept rental yields buoyant and made London and the South East very attractive to investors, many of whom are between the ages of 40 and 60 and seeking to safeguard their retirements.
With the continually strong performance of the private rental sector, many high-street banks are likely to look to increase their lending to buy to let investors; a move pioneered by the Lloyds Banking Group with the announcement that they are expecting an increase not only in their total lending in 2013, but also their buy to let lending as a proportion of this total.
Our verdict: 2012 was a good year to invest, and 2013 looks to continue this trend, with many lenders recognising buy to let as the most strongly performing property market. We may see increasingly competitive buy to let mortgage rates in the coming months as lenders try to attract more investors.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.