Number of buy-to-let investors up 8% in a year

The total number of buy-to-let investors in the UK has risen by 8% in the past year, to 1.63 million, according to letting agent Ludlow Thompson. 

The net income – rental income minus all costs – of these investors reached £13.1bn in 2012/13, 8% higher than the £12.1bn net income in 2011/12, according to calculations by the agent.

Record low interest rates on bank deposits and Government bonds means that the sector is continuing to attract new money as investors struggle to achieve comparable yields from other investment and savings products.

Ludlow Thompson says that 5 to 6% yields on investment properties remain achievable in some parts of London.
 
Capital growth for residential property was more than 7% in 2014 and 16% for property in London whilst the FTSE-100 increased by only 0.7% in a year.

Stephen Ludlow, chairman at Ludlow Thompson, said: “The high yields on offer from buy-to-let investments make this asset class one of the few options for investors who want to avoid the volatility of the stock market. A fall in inflation has also calmed fears of a sharp rise in interest rates.”

Ludlow says that recent regulatory changes to the mortgage market are making it harder for potential first time buyers to acquire mortgages – meaning that they stay in the rental market for longer.

“Also, pension changes announced last year, should allow potential investors to use these funds for a property purchase, offering far greater yields than pension funds,” said Ludlow.