Is It A Good Time to Invest In the Rental Market ?

News at Kerr & Co | 05/10/2023

Is It A Good Time to Invest In the Rental Market ?

Homeownership is still very much an aspiration for many in the UK, however the private rented sector can be underestimated despite it providing crucial accommodation to those who are unable to step onto the property ladder or not committed to buy. Renting gives flexibility, choice and affordability for the student market, young professionals, key workers, overseas workers and young families and is essential to the UK's economy .

Over the last 10 months rents have continued to rise and has seen an all time high, leaving many tenants finding it difficult to find their next home due to the lack of availability and choice. The rise in rents and rent increases have left tenants frustrated and landlords deflated as they too have suffered with rising costs, rising rates and bad press. Landlords, play a massive role in the UK property market, however with increased interest rates, changes in regulations and tax implications many landlords are weighing up their options too. So is it still a good time to buy a rental property ?

Why the Rental Market is Still a Good Option

Although new regulations may discourage some landlords from investing in the buy-to-let market - there are still key reasons why the rental industry could still make a fantastic investment option if you are a new landlord or landlords who want to increase their portfolio .

1 Long term investment returns : According to Rightmove the average house price in the UK increased by 20.4% between January 2020 and December 2022. Compared to many other investments. This level of capital appreciation has been consistent over the last decade. Although we can't predict the future - bricks and mortar has been a good investment for many.

2 Strong Rental Market : Regular income which increases with inflation helps covering the costs of being a landlord, any costs for maintenance, borrowing to investment or costs of ongoing works is covered by a regular income which has risen for various reasons

3 Shortage of Good Rental Stock : The level of tenant demand continues to outpace rental stock especially in Hammersmith and Shepherds Bush. Housebuilding levels is still not reaching government targets, this has added a massive strain on the private sector and landlords are experiencing high demand for their properties.

4 Rental Ownership as a Business : Many buy-to-let landlords and investors own and run their properties as a business and have registered as a limited company. This is a conclusive way of reducing tax costs and overheads. limited companies have been set up by landlords with larger portfolios, but its becoming more attractive for the smaller investor as a way managing thier finances . Like all investments it is important to seek independent financial advice and find out more information and if it fits your circumstances.

5 Is it still a good time to invest in the rental market ? The rental market is vital to the UK economy, UK landlords make a huge contribution to the housing market ensuring millions of people have a home each year. There are more responsible landlords than poor landlords which can give the industry a bad name. The rental market is still attractive and has proven to be a strong investment especially as a long term investment . As the rental market continues to evolve with the pressure of an increasing population, becoming a landlord is still and attractive option.

Our Expert Lettings Team at Kerr and Co have over 30 years in Shepherds Bush and Hammersmith. Once known affectionally as ' "bedsit land" its location and transport network has been a major pull for those renters who need and want to be near the West End and the City of London for work. As a result its been a desirable area which has attracted renters and landlords alike. Our property expertise and presence on the high street has ensured we are well placed to look after our hunderds of tenants and landlords daily.

Our Property Management Team have extensive local knowledge, professional expertise and a can do attitude to help all our landlords enjoy the rewards whilest keeping their tenants happy and well looked after. If you are looking to simplfy your property portfolio or just need some guidence and support in managing your property portfolio we would be delighted to have a conversation with you .