strong demand foretold in uk buy to let sector
News Posted On: 26 September 2011
A survey by property investment company Assetz has found that more than 3 quarters (76.8%) of UK investors are considering increasing the size of their portfolio in the coming year.
"Confidence in the UK buy to let market is robust, with investors highlighting strong rental demand as their main incentive for expanding their portfolios, followed by high and rising rental values, and the belief that prices are at or near the bottom," Assetz told Overseas Property Professional magazine this week.
"Just 10% of investors believe now is a bad time to invest in UK buy to let, with the majority citing concerns about the economy as the main deterrent," the company added.
The results are hardly surprising. The price collapse was far less pronounced than expected, and prices began rising again in April 2009, so affordability was not fully corrected. Combine this with the tight lending policies and huge deposits that most first time buyers can't raise, and it adds up to exceptional rental demand, and record rent rises.
What is surprising is that more of those who are planning to invest cited long term capital appreciation as their main priority, than those who cited rental income, with 50% and 46% respectively. Only 6% stated that they were hoping to benefit from a short-term capital gain.
This is despite the fact that 19.4% of investors surveyed are achieving yields of over 9%, and 45.9% of investors are earning over 5.5%.
Unsurprisingly banks are willing to lend more to buy to let investors, than to occupant-purchasers, with more and more products coming onto the market for landlords and investors as the market continues to boom. According to Assets, this is another draw for investors to buy now.
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Article written by Liam Bailey
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