How much in rental income do your buy to let properties yield? Like many landlords, you are probably enjoying the current surge in demand for buy to let properties and an increase in rental income as a result, but just how much are rents likely to rise over the next few years?
According to the experts, rental income for buy to let properties is expected to rise by more than 20% over the next five years, which represents a pretty decent return for your investment. The current figures for rental income earned by UK landlords is £48 million per year, but this is expected to rise to about £70 million per year in five years time. The same study has also forecast a considerable shortage in the number of available rental properties, which is rather worrying given the current demand for buy to let homes across large swathes of the population.
Why is there a shortage of rental properties in the UK?
In many countries, institutional investment in the buy to let market is common practice and property developers often build for investors rather than individual buyers. Unfortunately, in the UK this type of investment is seen as unattractive because property prices are high and better returns are available elsewhere, but in order for the buy to let market to thrive, more investment is needed. Mortgage companies are also hindering the growth of the buy to let market: by demanding higher deposits from would-be landlords, fewer people are able to raise the funds necessary for investing in buy to let properties.
