The Current State of UK Buy-to-Let
The buy-to-let market in the UK presents a mixed picture, with many saying buy-to-let is struggling or in a period of decline.
However, when you look across capital growth, rental inflation, and buyer demand it paints a somewhat different picture. The best cities to invest in UK property have achieved their highest returns for landlords for over a decade, with record-high rents and impressive rental returns.
Property prices have shown signs of stagnation in many areas recently, with some regions experiencing slight declines over the past couple of years.
This is in sharp contrast to recent boom times, where new buyers flooded the market hoping for successive periods of double-digit capital growth year on year. Those times do certainly seem in the past.
According to recent data, however, UK property prices have continued to grow this past 12 months in all regions apart from the capital, even if slower than previously seen.
Rental demand consistently is outstripping supply. According to a recent Zoopla rental market report, inflation in property rents is around 5.4%, which is the lowest it has been for almost 3 years, yet still stubbornly high.
When you consider central government and bank of England inflation targets are 2%, real inflation is still higher than anticipated at 2.2%.
You can see the significance of the rental demand is putting pressure on affordable housing for tenants.
Couple this backdrop with a consistent demand of buy-to-let property buyers as seen by the lending rates. Consistently year on year, mortgages for buy to let products remain somewhat consistent.
So what does that mean for the future of buy-to-let? It it still worth it? Are house prices still affordable? Or is this current government likely to pour cold water on the industry?