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As a Bristol letting agent, quite simply the answer is YES!
While you might think I naturally would say that a Letting Agent. I have always felt that investing in rented property in Bristol is a good idea. That’s not to say I have a large portfolio of personal properties. But over the last decade I have enjoyed Letting and Managing Property in Bristol, for Mr and Mrs Jones around the corner to the Multimillionaire with quite a few properties, and happily assisted them in the acquiring of investment properties.
Even in these times of difficult economic meltdown, Landlords are celebrating improved returns over the last 12 month as rents rose.
Whilst mortgages are not quite so easy to obtain as they were back a few years, it’s not impossible to invest in rented property in Bristol. Especially if you have a reasonable deposit.
ARLA’s research also showed that the value of rented properties is increasing. The average value of a rented house was £422,700 – up from a low of 371,300 in May 2009, while the average value of a rented flat was £260,000 – again, an increase on the 234,900 seen in mid-2009. These figures are for London, but are reciprocal throughout most of the country.
Figures from the LSL Buy to let Index showed that average rent in the UK rose by 0.6 percent to £663 per month in April, 2.2 percent higher than a year ago. Rents have risen for the third successive month and are now just £25 per month lower than their peak in August 2008.
Yields on buy to let property rose to their highest level all year at 4.8 percent, as rent increases narrowly surpassed slowing house price inflation. The monthly increase in house prices for the average rental property slowed to 0.4 percent in April – a drop from the 2.1 percent increase seen in January.
Recently my bank manager suggested I move my money about a bit, for what purpose I ask, for greater return!! Ha I don’t think so.
Despite the unprecedented times, and the various economic and political distractions the buy-to let market has gone from strength to strength, and landlords have seen their highest rents and yields this year.
“The UK’s political uncertainty surrounding the hung parliament – and its potential impact on the economy – will continue to depress demand for house purchase.
With transactional levels subdued, the private rental sector will play an even more pivotal role in providing accommodation for hesitant buyers, and we expect tenant demand and rents to be boosted in the medium-term.”
The total return from investing in buy to let over the last 12 months reached 12.8 percent.
The average landlord would have made £19,765 in the past year, £7,115 in rent, and £12,650 in capital appreciation.
This is the 14th consecutive month that annual returns have improved. The market in the south remained far more lucrative for landlords. In the past year a typical landlord in London would have made a total return of 18.8 percent (£39,090) and a return of 16 percent in the South East (£25,833). In contrast, a landlord in the North East would have seen a return of 5.1 percent, (£6,875).
Even if house prices dip slightly over the next year, a landlord investing today can still expect to make an annual return of 4.6 percent over the next 12 months†. This is equivalent to £7,682 on a typical property in the UK.
As house price growth has levelled off over the past three months, capital appreciation is no longer providing the lion’s share of a landlords’ total annual return. But investors are still seeing healthy profits, underpinned by strong rental income and improving tenant arrears.
“Capital growth is important over the long-haul, but it is rental income that allows property investors to run their businesses and pay their mortgages. Investment in buy to let must based upon the strong underlying fundamentals of rental income, yield and tenant demand. At present, these look very attractive.”
Improved annual returns have been supported by a second consecutive month of strong performance from tenant arrears. £220.3m of all rent in the UK was unpaid in April, a drop of £7m from March. This represents just 9.7 percent of all rents.
The buy to let market is really just beginning to emerge from the effects of the recession, and already landlord are only a few pounds away from the record rents they received before the downturn
Supply of good quality rented property is in short supply, but there is continued demand, and this is set to continue for the foreseeable future. As first time buyers are squeezed out of the purchase market as they cannot stump up sizeable deposits demanded by lenders, and are therefore switching to renting.
The private rented sector has increased more rapidly than any other tenure, with three million households now renting privately, and predictions that one is five people will be living in rented accommodation by 2020.
If I have not convinced you, why not give me a call, or if your considering investing in property in Bristol. I have been a specialist in the private rented sector in Bristol for over a decade. www.igloolets.com or you can contact me 24/7 on 0845 652 1428
