With savers receiving poor returns from banks and building societies, thousands of people unsurprisingly continue to turn to residential property as a means of supplementing their income, supported by record-low mortgage borrowing rates, growing demand from renters and stable yields, as buy-to-let consolidates itself as the investment of choice for many investors. 

Despite a challenging time for the market, characterised by tax and regulatory changes, investment in buy-to-let continues to outperform most major asset classes, as demand for properties in the private rental sector continues to grow.

David Alexander, joint managing director of apropos by DJ Alexander Ltd, said: “There is still money to be made in the private rented sector and being a landlord can provide a reasonable income and a healthy pension. But landlords need to be more savvy to make it work and much more pro-active than in the past.” 

“You must ensure your finances are arranged as efficiently as possible, that your costs are reduced to the minimum, and that your margins are as good as they can be.” 

Rents in the UK’s private rented sector are rising, with the latest data from HomeLet revealing that they reached £953 per calendar month (pcm) in October, up 2.7% year-on-year. 

All 12 of the regions monitored by HomeLet showed an increase in rental values between October 2018 and the corresponding month this year.

Meanwhile, according to the latest mortgage lending figures, the number of new BTL loans achieved its second highest figure for the year in October 2019 at 6,600 while the value of these loans equalled the highest for the year.

BTL remortgaging was at the second highest level for the year in October 2019 at 6,600 and matched the highest monthly value of the year. 

The number of BTL mortgages in arrears has dropped by 5% in the third quarter compared to the same quarter in 2018 and the total number accounts for just 0.23% of all BTL mortgages outstanding.

Alexander continued: “Being a landlord has never been more difficult but like all businesses the best people will understand the need for flexibility and be ready to change to meet the circumstances. It is inevitable that there will be change and you must make your business model to match the market. 

“There may be some casualties along the way but BTL remains a profitable and viable investment for those who adapt and thrive in a changing market.”