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Buy-to-let remains a ‘lucrative investment’ as rents rise across the UK

Private rental prices paid by tenants in the UK rose by 1% in the 12 months to January 2019, unchanged from December 2018, according to the data from the Office for National Statistics (ONS).

In England, private rental prices grew by 1.1%, Wales experienced growth of 0.9%, while in Scotland private rental prices increased by 0.7% in the 12 months to January 2019.

London private rental prices rose by 0.1% in the 12 months to January 2019, down from 0.2% in December 2018.


Reflecting on the latest rental data, Marc von Grundherr, director of Benham and Reeves, commented: “Despite the war waged on buy-to-let landlords by the government of late, the sector remains a lucrative investment with yields in many areas of the UK holding firm.

“Of course, changes to stamp duty and tax thresholds have had a notable impact and as the government look to rob Peter to provide a house for Paul, an inadequate level of suitable rental stock will ensure rental growth remains buoyant as demand exceeds supply.

“Come June, we may see a further unsettling of the sector with the introduction of a ban on lettings fees and it will be interesting to see how the dynamic shifts between tenant, landlord and agent and whether this has an immediate impact on the cost of owning or renting a buy-to-let property.”

Given the current market landscape, a continued increase in the cost of renting was to be expected and this is likely to remain consistent over the coming year, according to Tom Gatzen, co-o-founder of ideal flatmate.

He said: “Not only is a lower level of rental stock a contributing factor, but we’ve seen yet more pressure added as a result of Brexit based uncertainty as hold off on a purchase until the political dust has settled. Many

“Despite a marginal slowdown in London rental growth, we’ve seen a sustained level of demand for room rentals early in 2019 with the number of letting agents and landlords bringing stock onto the market continues to slow.

“We believe this is only a temporary hesitation although it could persist until the letting fee ban is introduced and both agent and landlord know where they stand for sure, in which case the imbalance of supply and demand will see London rental price growth increase once again.”

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Poll: Do you think buy-to-let remains a lucrative investment?


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    I bought property instead of a private pension, for me it's the income not the capital gain as i have no wish to sell anything.


    I agree Andrew, I am not in it for the gain fortunately, because house prices haven't moved down here for around twenty years and neither have the rents, but still a better return than I can get from the banks, for now anyway.

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    • 14 February 2019 10:55 AM

    I believe that tenants despite their justified protests will find they are subject to vastly increased rents.
    In most cases especially for leveraged LL this is being forced on them by S24.
    They will take pragmatic steps to reduce their costs.
    Many LA will find that LL desert them for self- management.
    Reducing costs might assist the leveraged LL slightly but overall rents will have to increase.
    A tenant is not paying enough if at the end of the month they have more than £50 to spend on anything they like.
    There is plenty of headroom for tenants to pay more.
    They won't be able to pick and choose.
    It will be a case of getting any rental property they can at whatever price such will be the shortage of rental properties along with increased competition from other tenants due to continued mass uncontrolled immigration.
    Tenants are in for some tough times.
    Forget going on holiday or having nice clothes along with the daily latte.
    They'll be struggling just to pay normal domestic costs along with increased rents.
    Tenants will have to accept that previous lifestyle is not going to be available due to paying increased rents.
    They don't have any choice in the matter much like the rail commuter who is forced by circumstance to pay more in fares.
    There are no other alternatives for most.
    There certainly is not going to be a magical increase in rental property supply.


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