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06 Nov, 2023

Buy-to-Let Landlords Target Long-Term Returns

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    Landlords Showing Faith in the UK Buy-to-Let Market

    Landlords nationwide are optimistic about the buy-to-let market moving forward, according to Leaders Romans Group.

    LRG conducted a nationwide landlord survey, trying to understand how landlords felt about the current market.

    Discover the latest property market trends in 2023 below!

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    How Do Landlords Feel About the UK Rental Market?

    According to the survey, 75% of landlords see the current supply and demand issue as an opportunity to make money in the private rented sector.

    Demand is currently up by 32% year-on-year. August 2023 saw 197 potential tenants register for property listings – up from 149 in 2022.

    This robust demand for rented accommodation is opening the door for landlords to step into the market.

    62% of landlords cited current market conditions as an opportunity to increase yields.

    For instance, the average UK rent has risen by 10.09% in the last year (according to the Homelet Rental Index), while the UK House Price Index shows price growth has only increased by 0.2%.

    Get updated UK property market predictions for the next 5 years with RWinvest’s 2023 forecast!

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    How Do Landlords Feel About UK House Prices?

    The survey shows landlords are also optimistic about property prices moving forward. 40% of participants expect house prices to go up from 2024 onwards.

    There are numerous resources that back up this outlook. For instance, easyMoney predicts house prices to reach £300K by 2025 – they are currently at £291,044 according to the Land Registry UK House Price Index.

    While inflation and rising interest rates have caused a price slump in the housing market, falling inflation and halted interest rates give some hope that the market will correct itself in the near future. It remains to be seen whether prices will improve in 2024. However, once interest rates come down and wages come up – people will have more money to spend, and we should see real movement in the housing market again. This is the view of the RWinvest Property Investment research team.

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      How Does LRG View the Property Market?

      LRG acknowledges the issues facing the current market but also anticipates that interest rates will decrease in the run-up to the 2024 general election, boosting the housing sector for landlords and homebuyers. If you are looking to invest in Property, now is a good time.

      LRG’s National Lettings MD Allison Thompon said:

      “Demand for rental properties has seen a 32% increase since last year, with rental prices continuing to rise. This shows the return on investment for landlords remains positive. Those landlords we have recently surveyed remain optimistic about the opportunities available in the coming year. LRG’s resounding message to landlords is to remain committed on the basis that property investment is a reliable and lucrative long-term option.

      “Furthermore, due to high levels of demand for rental properties and a slow-down in property sales, we’re increasingly providing lettings advice to homeowners who need to move but are struggling to sell or don’t want to reduce their house price. Across the country, across different property types and locations, many people in this position are taking advantage of unparalleled demand in the lettings sector.”

      LRG’s research shows landlords share the same optimism.

      68% of landlords responded to the survey and said they would maintain the current holdings, while 6% looked to expand their investments.

      In addition, 61% of landlords were still confident in property as a retirement investment. Why not read about some of the best retirement places the UK has to offer with our free guide?

      While challenges still face the UK housing market, both landlords and industry experts believe there are plenty of positives in the BTL market for the foreseeable future.

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      Author

      Dale Barham

      Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.

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