Throughout 2013 and 2014, many investors across the UK put their faith in the nation’s private rented sector as a way to get themselves strong returns on their outlay, and according to a new report, they were rewarded in a big way last year.
Rental prices in 2014, according to findings published by the Office For National Statistics, finished the year 1.7 per cent higher than the year before, meaning that those who had bought into the sector were welcoming stronger returns than they had a year earlier.
There was growth throughout Britain as well, with a breakdown of the statistics showing that Scotland welcomed rental increases of some two per cent, while England saw prices jump by 1.8 per cent and Wales saw marginal 0.2 per cent growth in the same period.
This means that the Office for National Statistics has now increased its long-term predictions for the property market after stating that rents had increased at a rate far faster than it had expected them to in 2014.
David Whittaker, managing director of Mortgages for Business, said it was no surprise that this had happened, as the buy-to-let sector continues to be a very strong investment area and persistently delivers the sort of returns that make an attractive venture.
He said that at the moment, the average rental property will bring in a return of around 6.3 per cent. However, larger multi-unit blocks, where it is often possible for an investor to purchase units below market value, can even see yields hit levels as high as 9.3 per cent.
At the same time, the market remains sustainable, which is fantastic news for investors. Sometimes when something is on the up in terms of returns, it will reach an affordability barrier that means it either has to decrease in value or level off.
However, because of the strength of the demand in the private rented sector, rental increases are sustainable. In fact, they generally are in line with the rate of inflation, which means the possibility of them getting out of hand and unaffordable are very slim.
As a long-term prospect, few investment asset classes look stronger than UK buy-to-let.
This article has been provided by Experience Invest a leader in UK residential and buy-to-let investments