As any landlord knows, the rental market has increased phenomenally over the last few years as more and more people choose to rent rather than buy their home. But is this trend a temporary one, or will the number of people renting as opposed to buying continue to rise over the next few years?
Research from UK estate agents and property websites seems to suggest that the trend is not a temporary one and current estimates indicate that by 2016, around one in five homes will be rented in the private sector instead of owner-occupied. Unfortunately, there are not enough rental homes available to meet the demand, so unless a further 1.1 million homes are added to the pool of available buy to let properties, there is likely to be a massive shortage, and as I learnt in my Economics class in school many moons ago, when demand outstrips supply, prices go up.
Current figures show that around 27% of homes in London are now let in the private sector (which has overtaken the social housing sector for the first time). The average rent rose by 5.2% across the UK last year and landlords in the buy to let sector earned approximately £48 billion in rent in 2011, a figure which is expected to nearly double over the next five years.
This is obviously good news for landlords looking to invest further in the buy to let market, so if you are still on the fence, now would be a good time to consider whether buy to let is the right move for you.
