Rental prices are set to rise in the UK as demand for rental property outstrips supply. According to a report by mortgage lender, Kent Reliance titled ‘Buy To Let Britain’, the future looks bright for the buy-to-let (BTL) sector in the UK, despite a recent onslaught of government intervention in the market, which has seen the phasing out of mortgage interest relief on tax returns and the introduction of the stamp duty surcharge.
The report points to the ongoing absence of first-time buyers and the effect the lack of first-time buyers in the housing market is have on driving demand for rental property, something that is likely to continue.
Kent Reliance predicts that the BTL market will continue to become increasingly more professional, as it bridges the gap in supply. This professionalisation of the sector will see the services landlords provide for tenants improve, as less experienced landlords exit the market, the mortgage lender estimates.
Such professionalisation is already occurring, with 31% of landlords in the UK making a full-time income from their BTL investments. This compares to three years ago, when a more modest 26% of landlords were making a full-time living from their investment portfolios.
The data shows that a growing number of landlords are operating as a business, setting up a limited company, which enables them to offset mortgage interest against tax costs. In the first quarter of 2018, 78% of applications for BTL mortgages were made via limited companies, over 50% more compared to two years ago.
If you are thinking about joining Britain’s burgeoning buy-to-let sector or are wanting to increase your portfolio of rental properties, Auction House London’s property auctions could be the perfect place to find your first or next buy-to-let investment.