For many people buy-to-let continues to look an attractive income investment at a time of low saving rates and stock market volatility as illustrated by fresh data revealing that the number of landlords in the UK rose by 7% in 2013-14 to reach 1.75m.
Figures from estate agent ludlowthompson, based on data from HM Revenue & Customs, showed 1.75m people declared income from property during the year, up from 1.63m in 2012-13, as they seek to take advantage of attractive returns from but-to-let that currently beat all other mainstream investments, including commercial property, UK government bonds, shares and cash.
Landlords collectively earned £14.2bn in net income from their rental properties during the year, up from £13.1bn the previous year.
“The returns routinely outperform those of other investments,” said Stephen Ludlow, chairman of ludlowthompson.
The data provided by HMRC is the latest available on landlord numbers, but the actual volume is widely expected to have increased since, as indicated by a surge in mortgage borrowing by landlords ahead of the stamp duty change on 1 April.
The government has frequently promoted the benefits of homeownership, pledging to help young people by turning 'generation rent into generation buy', but that has not deterred investors.
The chancellor George Osborne is now hoping that the 3% stamp duty on second properties will slow the buy-to-let boom, along with reduced tax breaks for landlords. From 2017, the ongoing cost will start to increase for landlords who pay the higher rate of tax as relief on mortgage repayments starts to be withdrawn.
Thompson added: “Investors continue to be drawn to the buy-to-let market as the returns routinely outperform those of other investments.
“Buy-to-let investments are a highly popular alternative to the volatility investors often risk when investing in the stock market.”