Property investment is all about finding the segment that will give you the greatest returns and stability over the long term. However, in a sector that is always changing, this can be difficult: one year's hot asset can be next month's financial drain. Perhaps it is no surprise then that one of the most popular investments in the UK at the moment is buy-to-let residential property. After all, people will always require a roof over their heads.
Research from the Association of Residential Lettings Agents (ARLA) showed that landlord investment has increased significantly over the past three months. This is despite a slight easing of tenant demand. In fact, the proportion of ARLA members who think landlords are currently increasing net investments in the private rental sector has risen from 30 per cent to 39 per cent. According to ARLA analysis, this indicates rental property is perceived as a safe investment amid continued financial instability.
Meanwhile, the number of landlords selling their properties is down incrementally on the previous quarter, going from 15 per cent to 14 per cent. Demand is also still strong, with 54 per cent of respondents saying there are more tenants than properties. This is down from 57 per cent seen previously, which could indicate construction is picking up again.
Susan Fitz-Gibbon, director of specialist letting agents Fitz-Gibbon and President of ARLA, said: "Our research shows that rental properties are still seen as a good investment option, despite the challenging economic climate. The slight slowing in tenant demand is worth noting, but the overall trend is still a continued appetite for rental homes. We would urge anyone planning to let out additional properties, or landlords looking at changing their portfolio, to do plenty of research and consult with experts."
For investors looking for high yields, the north-east is proving to be a hot spot. Low property prices are enabling landlords to make a strong return on their investment. However, London continues to demand the highest rents and with tenants moving to the peripheries of the city, opportunities abound in renovation areas.
- Thursday 20 June 2013