The UK’s buy to let property sector is set for continued growth in 2015 with tenants, in particular, feeling the most benefit from prospective changes in the market.
National residential lettings specialist, Belvoir, says that current economic conditions, combined with likely interest rate increases in 2015 and the uncertainty of Government policies following the General Election could result in either static or low rental increases next year.
Paul Cartwright, who owns Belvoir offices on Palmerston Road in Southsea and on London Road in Waterlooville, says: ‘Our past predictions for continued and sustained growth in the buy to let sector have been borne out by shifting market forces and we believe that the number of people choosing to rent – either for lifestyle or economic reasons – will continue to drive up demand for some time to come.’
Dorian Gonsalves, Belvoir’s Commercial Director, adds: ‘In 2015 we believe that rent rises are likely to be restricted by factors such as continued low disposable income amongst consumers, an anticipated interest rate hike towards the end of next year and a lower than expected forecast for economic development.’
Recent research suggests that rents will rise by an average 1.8 per cent over 2015 which is below the Bank of England’s target inflation rate of 2 per cent.
Belvoir’s independently commissioned Rental Index Report, which for the past seven years has tracked the ups and downs of the UK’s buy to let market, reveals that most of the company’s 160 offices nationwide witnessed little or no growth in rent levels throughout the current year, albeit there have been falls and rises during this time.
‘For the year ahead, we believe it unlikely that changes to rents will vary much more than 2014 versus 2013,’ says Dorian.
Analysis of regional rents in the report revealed patchy variations across the country, with many rents not rising at the same levels as property prices - bringing good news to hard pressed tenants who have not seen a widespread increase in wages for some time.
‘This has a major impact on rents because if ‘real’ wage levels and spending power do not increase, rents will also struggle to be increased.’
On a brighter note, many landlord investors benefited from a significant recovery in property prices in 2014. London and the South East saw rapid growth, while other areas around the UK achieved increased values of between five and 10 per cent.
‘But any new investor in buy to let needs to consider all the facts and seek out expert advice and guidance so they can understand all the issues,’ adds Paul Cartwright.
‘Each area of the country is different, so people must not assume anything about local property values or market conditions. Our highly trained staff have extensive local knowledge and a thorough understanding of how to maximise returns from property investment. If you contact our office we are happy to provide an initial, free consultation.’