By Sali Brown
Managing Director
Chelton Brown
THE most recent figures suggest that rental values continue to rise – meaning that buy-to-lets are still one of the most attractive investments available.
Interest rates are still low and properties can be acquired at relatively reasonable prices, so many people are putting their money into a sector that delivers a regular income while also being an investment for the future.
The housing plan for the county will see new homes continuing to be built, bringing employment to the area, as well as the need for short and longer term rented accommodation. The new properties will see a new wave of first time buyers as well as a growing number of investors who see it as the best platform for investment.
Figures produced by HomeLet, the tenant referencing and specialist lettings insurance company, suggest that the average new tenancy achieves around £925 compared to £915 a year earlier. Rental rates are currently running at an inflation rate of 1.6 per cent, making it an ideal time to buy investment properties.
At Chelton Brown we have seen these increases first hand and can report our average rent as approximately £750 pcm, which is a huge increase. In 2014 I ran a report on our managed portfolio and reported the average rent to be in the region of £600. We have seen two-bedroom properties in this period increase from around £550 pcm to about £700 pcm. With mortgage rates low, this represents a great increase for our investor clients.
So while the landlord may be being hit hard with tax and stamp duty, the rents have risen well to compensate and see portfolios bring in good returns.
In the medium to longer term, the fundamental driver of rents will be the balance between demand and supply for rented property. We expect demand in the private rental sector to continue to grow in line with demographic changes such as population growth and as affordability concerns remain in the house purchase market, so it is important that we see efforts to support supply.
Taking all this in to account, I believe that the property market is very stable with steady capital growth and a great return on investment.
If you would like more information about letting, selling or property investment, call Chelton Brown on 01604 603433.
