Market overview

There are several reasons why people decide to invest in property, for some it’s their main source of income, for others it’s a side line to boost their pension, whatever your reason the following information could help you determine whether investing in property is right for you.
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Learn why buy-to-let could be a great opportunity for you.

Regardless of whether investing in property is a conscious decision or a result of circumstance it certainly appears to be a worthwhile venture if the number of properties owned by private landlords and companies is anything to go by.

Buy-to-let mortgage lending is at an 8 year high, one in five properties are currently owned by a private landlord and the total number of private rented properties is predicted to treble in just over 15 years.

Will the market continue to grow?

Already a well-established market, experts within the mortgage industry are forecasting significant growth in buy-to-let properties over the next 15years, infact buy-to-let experts predict the market to have trebled with as many as one in three properties owned by private landlords by 2032.

What is it that’s driving the growth of the buy-to-let market?

There are a number of factors driving the growth of the buy-to-let market, from an increase in house prices making purchase more unattainable, to one person households predicted to account for two thirds of future households and a large proportion of which won’t want to settle for a one bedroom flat.

Of course renting also provides greater flexibility, increasing demand as more and more people don’t want to be tied down by the constraints owning their own property brings.

Include a decrease in social housing and an increase in those gaining access to investment following the pension reforms and it’s easy to see why the buy-to-let market is growing.

Will it be profitable for me?

On paper buy-to-let appears to be a profitable venture it is imperative to determine whether it works for you, and the only way to do that is to establish your expectations and what you want to get out of it.

For example are you a career landlord? Is buy-to-let your business? Is the profit from going to be your main source of income or are you just looking for a side line to boost your pension?

The easiest way to work this out is to play around with the monthly rental you can charge, research similar properties in your area and what the going rate is.

Find a balance between making enough for it to be a worthwhile investment and being competitive. You can then use this information to calculate your rental yield (think monthly income); divide the net rental income by the value of the property not forgetting to include the costs associated with buying a property.

As a benchmark the UKs average rental yield is currently around 5.9%. Finally think about capital growth, whilst property prices do fluctuate as a long term investment you want to be able to sell the property one day for more than you paid for it.


Bank of England Stats, Q3 2014
Daily Telegraph, Oct 2014
YouGov / Savills Research – Spring 2014
Departments for Communities and Local Government (DCLG)
Institute of Mortgage Lenders (IMLA)
Council of Mortgage Lenders (CML) Data
Government Actuarys Department