David Lawrenson of lettingfocus.com said there are no limits to the growth of buy-to-let.
Lawrenson said demand in the buy-to-let market will increase due to the following reasons:
1. Housing supply will not keep up with housing demand, especially if there is no change in net inward migration.
2. People will continue to look increasingly to property as a secure investment, because they see the stock market as too volatile, they’ve been failed by the life companies in the endowment scandal and they don’t trust the government on pensions.
3. As owning a home becomes impossible for those who can’t rely on parents for a leg on to the ladder, they will be forced to rent – thus providing a ready pool of tenants and rising rents.
4. People are increasingly attracted to renting as a lifestyle that fits the hire and fire work culture of today. Renting means people can be flexible and move to another area for work much easier than if they are a home owner.
Lawrenson commented: “Sixty years ago, well over half of all properties in the UK were privately rented. But the years of post-war rent controls took their toll and private letting collapsed as a business. Everything changed in the late '80s when new laws made it easier for landlords to recover possession of a property. The proportion of houses in the UK that are rented from private landlords is recovering from a 1980s low of about 9 per cent, but is still only about 11 per cent today. In the long term I think that privately let property will account for a much higher proportion of the housing stock than today. In fact, we could easily see the proportion of property that is either let out or used as second or holiday homes hit 50 per cent of the UK housing stock by 2026.”
Nick Clark, managing director of the Property Investor Show where Lawrenson will be speaking, believed strong returns can still be made from the buy-to-let market. He said: “Buy-to-let continues to provide landlords with a good income. Yields of around 6 per cent are quite common, and the influx of immigrants, especially from Eastern Europe, is positive news for future demand levels. However, research is vital for those who want to ensure they are successful. By speaking with industry experts both novices and professionals can learn a few of the insider secrets of how to be a successful landlord.”
