Buy to Let Landlords Benefitting from Housing Cost Increases
A major housing shortage in the UK is creating golden opportunities for buy to let landlords who are getting prime fees for rental cost. At present landlords are pulling in an average of more than £20,000 per year for every property they own. This is the highest average they have enjoyed in more than four years. The housing shortage is creating opportunities for some and creating havoc for many others.
The government is urging councils to plan for more building, but in the midst of heavy recovery from a massive economic hurdle, it is slow-going.
The average gains on buy to let properties are set to increase as well. Dwelling costs are only expected to rise in the coming months which will make it easier to collect more in rent. The current 12% yield is expected to jump to more than 13%, according to LSL Property Services.
Brits currently are paying upwards of 40% income on housing costs. That percentage could easily increase as the months pass. House owners are also urged to consider a flat rate remortgage deal which could help the bottom line.
David Newnes, with LSL Property Services, commented on the perception which currently exists within the buy to let market, saying: "Private renting is becoming cheaper in real terms. May's latest sub-inflation rent rises will help over nine million tenants."
Newnes added: "These trends put the recent politicisation of the rental market in stark contrast to reality. Rents are not a single pound higher than they were in December – yet over the same six months some politicians have portrayed the industry as facing some sort of crisis.
"A squeeze on living standards may well be the biggest challenge of our age. But rents are not the cause.
"In fact the greatest risk to today's below-inflation rent rises is that political posturing could deter some landlords from the market. Rather than conjuring up a storm, politicians should be working constructively to ensure there are even more homes available to let."