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Buy to let landlords enjoy 15% greater returns

By Surrenden Invest | March 22, 2019

Buy to let landlords enjoy 15% greater returns

New analysis of HMRC data by lettings agency Ludlow Thompson has revealed a 15% jump in buy to let landlords’ rental income in a single year. Rental income for 2016/17 (the latest year for which data is available) totalled £18.7 billion – up 15% from the £16.2 billion of rental income in 2015/16.

“We’ve seen a diminishing number of buy to let investors over recent years, in part as a result of the government’s tinkering with stamp duty land tax and mortgage interest relief rates. One notable outcome of this has been the increasing professionalisation of those who remain committed to buy to let – investors are looking for the very best that the market has to offer. Another impact, based on the latest figures, seems to be that those investors who have stuck with buy to let are now enjoying an even larger share of greater returns.”

Jonathan Stephens, MD, Surrenden Invest
Of those who remain within the buy to let sector, their investments can serve as both a means of current income and a nest egg for retirement. The stability of that monthly income is unlikely to waver much as a result of the Brexit process, given the UK’s large-scale inability to supply enough homes to meet the demands of its rapidly growing population.
Meanwhile, that same lack of supply is contributing to the long-term appreciation of their capital. Savills projects five-year compound property price growth of 14.8% for the UK as a whole, with many areas predicted to achieve price increases well in excess of this.
In the West Midlands, for example, Savills anticipates growth of 19.3% between now and 2023. This is good news for those investing in buy to let property UK opportunities in cities such as Birmingham.
A hub for regional redevelopment, Birmingham is home to some outstanding residential property investment opportunities. An example is No. 76 Holloway Head – a development of 34 apartments in an ultra-prime B1 location, directly opposite the city’s most expensive apartment and just a minute’s walk from the upscale Mailbox shopping and dining destination. Available from £197,625 and with yields of 6.0%, the apartments are precisely the kind of high-end buy to let opportunity that investors are keen to pursue.

“No. 76 is one of those property investment opportunities that is in the perfect place at the perfect time. The whole B1 postcode area is undergoing significant regeneration and those who have the vision to be part of its future right now look set to reap some impressive rewards in the future, both in terms of rental income and capital growth.”

Jonathan Stephens, MD, Surrenden Invest
As Ludlow Thompson points out, wages inflation is growing steadily, and rental increases tend to track wage rises. This is mirrored by the Savills’ Autumn 2018 Residential Property Forecasts, which projects family income growth of 16.1% and rental growth of 13.7% nationally over the five years to 2023. All things considered, the outlook for buy to let investors is an overwhelmingly positive one.

For regular updates on investing in regional cities around the UK, be sure to follow the Surrenden Invest team on social media.

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