Having long provided mega double-digit returns for investors, investment in buy-to-let continues to outperform other major asset classes, including bonds, cash and shares, with total net income having increased by 39% in the last five years, according to ludlowthompson.
Analysis of HMRC data by the letting agency shows that total net income between 2010/11 and 2014/15 jumped from £10.8bn to £15bn, and this figure look set to rise further moving forward.
ludlowthompson adds that private landlords’ income has risen 6% in the last year alone from £14.2bn, reflecting how increasingly important the buy-to-let sector is to UK private investors.
With more people now renting privately than from councils or housing associations, ludlowthompson says that it is important that the government introduces policy to help buy-to-let landlords.
“Private landlords play a vital role ensuring there is a healthy supply of high-quality rental accommodation that enables labour mobility,” said Stephen Ludlow, chairman at ludlowthompson.
“The fact that the recent housing white paper recognises the importance of the rental market to many people’s lives is highly encouraging and a step in the right direction. It is finally beginning to acknowledge that renting is, in fact, part of the solution to the housing crisis,” he added.
Despite the government’s decision to introduce a number of measures to curb the growth of buy-to-let landlords, with a raft of changes designed to deter fresh investment in the sector, such as the introduction of the stamp duty surcharge and the current phasing out of mortgage tax relief, ludlowthompson believes that buy-to-let property will remain attractive to investors.
Ludlow commented: “With record low interest rates on bank accounts, individuals are increasingly relying on residential property for their investment income.”
“Buy-to-let property consistently delivers strong returns over the long term, and it is now a key investment sector.”
Private landlords’ income continues to increase year on year: