Landlords turning to student market

Recent changes to the way landlords are taxed have caused questions to be asked in large sectors of the buy-to-let market.

But in spite of warnings that buy-to-let is struggling, investing in Britain's private rented sector continues to attract many people looking for a decent return on their money.

This is because it is still possible to make an investment in UK property profitable - you just need to know what you're doing and be much more selective than before.

One increasingly popular approach over the past few years has been to put your money into student accommodation, where investors can benefit from lower house prices in regional cities and towns and higher rents from multiple tenants.

In the last academic year there were 2.32 million students studying at UK higher education institutions, according to Universities UK.

The student lettings market has evolved rapidly in recent years, with a move towards purpose-built student accommodation alongside the traditional houses in multiple occupation.

Landlords need to be more savvy

Buy-to-let returns continue to outperform many major asset classes with property investors in Northern areas benefitting from higher yields, owed in part to lower property values. Southern regions unsurprisingly have the lowest yields given the higher housing costs.

Recent research reveals that buy-to-let returns have remained strong in recent months despite the challenges that have faced the market, with Liverpool, Manchester, Middlesbrough, Newcastle and Edinburgh proving to be the top performing regions thanks to high demand for rental properties.

The research, which analysed more than 600,000 properties, once again reveals a clear geographical divide between the north and the south of the country with northern regions coming out on top and the South East in particular showing particularly poorly. Unsurprisingly landlords in London have seen the lowest rental yields.

Students are flocking to university cities year after year and looking for a place to live, it’s no surprise the student market is a dependable one for landlords. This area of growth is most certainly the landlords key to profitability in the future.

Buy-to-lets remain strong and stable

The average buy-to-let loans and deposits have increased in 2018, new research has just revealed.

This has come about as a result of soaring property prices and the tougher stance taken by lenders on criteria and rental calculations.

The findings reveal that landlords borrowed an average of £16,800 more to buy property in 2018, in comparison to 2017. The average loan this year has risen to £187,500, up from £170,268 the year before.

Meanwhile, the average loan to value fell from 64.6% in 2017 to 60.7% this fiscal year. What’s more, landlords and investors paid out more for their properties year on year. The average property price in the South of the country last year was £309,000 up from £298,286 the year before.

Buy-to-let market strengthening again

Times are hard for first time buyers at present which has strengthened the buy-to-let market even more. Young couples and first-time buyers looking to join the property ladder could be in for a very long wait. Figures just released this week are showing that a combined salary of over £43500 is required on average to enter the property market. So what is required these days to buy a new property is almost twice the UK average wage of £22000 per annum and as most people will know that is very difficult.

As a result of all this many couples are turning to the rental market for housing and this is providing a boost in demand for landlords and buy-to-let investors. The Government recently have tried to curb the buy-to-let market by increasing taxes on landlords. This initially had the desired effect but now figures show new buy-to-let mortgages are on the increase again.