The number of buy-to-let investors rose in fiscal year 2012/13 as did the income from the sector, letting agent Ludlowthompson says.
The number of people who decided to put money in buy-to-let deals climbed to 1.63 million from 1.51 million within a year, this was an increase of 8 per cent.
Their profits from renting out the properties also grew by 8 per cent to £13.1 billion.
Buy-to-let is becoming more popular as a way to invest money because the returns are better at the current low interest rate climate, Ludlowthompson says. Furthermore, “the recent regulatory changes to the mortgage market are making it harder for potential first-time buyers to acquire mortgages – meaning that they stay in the rental market for longer,” the letting agent’s chairman Stephen Ludlow says.
“Also, pension changes announced last year, should allow potential investors to use these funds for a property purchase, offering far greater yields than pension funds,” Ludlow adds.
Ludlowthompson names a few other factors that could make buy-to-let investments more attractive over time:
*Not enough new social housing projects – keeping the lid on public spending leaves more opportunities open for the private rental sector
*Planning restrictions – UK’s stricter planning rules as compared to those in Europe curb new the extent of new developments
*Economic and employment recovery – the growing economy and the increasing number of jobs will increase demand for new homes among workers who will look specifically for flexibility of tenure
*Regeneration – new and existing communities are set to benefit from the development of private sector projects and the obligations under the Town and Country Planning Act 1990 that come with that. This could lead to regeneration and gentrification of certain London areas, as a result of which property values and rents may increase
*Better transport – the improvement in transport in the Greater London area is likely to draw more investments in properties around transport hubs
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