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Over the last few years the Private Rental Sector has seen many changes with added regulations and compliance as a result of the government’s desire to improve the standard of private rented accommodation. In addition, changes to the way rental income is taxed has made many landlords consider their existing portfolio or consideration to purchasing extra properties.
Andrew Luxton MRICS FARLA confirms that currently there has never been a better time to consider an investment with the BTL sector still showing returns well in excess of other investments. The current demand from tenant’s relocating to the region is unprecedented putting upward pressure on rents.
Overall, yields are calculated by a combination of the rental yield and capital growth. In 2020 property prices in the South West increased quicker than in any other UK region with the average price of a house increasing by 17%. It is predicted that house prices will continue to increase by an average of 13% over the next 5 years.
Coupled with this are rental values with the highest annual rental price increase of 2.3% seen in the South West. With relatively high property prices rental yields often fall between 4 and 5 % annually. This, combined with capital yields bring the overall gross return to between 15 and 20%.
The fundamentals of a Buy to let investment remains exactly the same and research is essential- good location, good demand, good capital growth. Landlords should seek the best qualified advice from agents who have experience in the area in which they are considering to invest. The Stags Buy To Let guide available is a useful indicator of what to consider and look out for.
Over the last few weeks we have seen an encouraging number of landlords considering a further purchase and as a firm we are regularly providing this advice either in person having visited the property or remotely with many desk top/virtual valuations being undertaken. In addition, the majority require full management which takes away the burden of day to day issues and the need to keep up to date with all the various changes affecting the sector. Stags are able to offer a number of services to include rent collection, full management and rent guaranteed options - discounted for landlords with multiple properties.
For more information visit the property investing section of our website, contact one of our letting or email us at buytolet@stags.co.uk
