It seems that the prospects for the UK buy to let market in 2014 are likely to be as good as in 2013 and appear to be surging out towards the regions where average gross yields are at their highest.
The Financial Times (30/12/2013) details the highest yielding regions in the UK; yields of 8% plus are to be found in Southampton, Coventry, Liverpool, Cardiff and Manchester.
Medium yield areas such as Sunderland, York, Preston, Stoke on Trent, Oxford and Canterbury are producing between 6% and 7%, and are regarded by most property professionals as the best long term investments for BTL landlords. Compare this with London whose average yield is 5.1%.
Two thirds of BTL investors (who have an average portfolio of 10 properties) are planning on increasing their portfolios in 2014, following the million reported BTL transactions that reportedly occurred in 2013. This is a dramatic increase in activity since the ‘Great Recession’ but it is still below the record levels of 2006/7 when there were 1.6 million transactions.
Average rents saw an increase of 4.2% in 2013 and rental costs have reached record levels of £757pcm, so it looks as if BTL investors are benefiting from both increased income and capital level increases, seemingly a ‘win/win’ situation.
This situation has not gone unnoticed by foreign buyers (including ex-pat UK residents) who have now reached 2 million (non-commercial) BTL investors in the UK market.
UHY Hacker Young have recently completed research on this topic and conclude a 39% increase in such buyers entering the BTL market in the UK over the last five years.
All of this is good news for the Revenue who received £379 million from these investors at year end March 2012.
If you are considering expanding your existing portfolio or entering the BTL market you will need the advice of specialist BTL property lawyers, and our specialised experienced lawyers can assist.
Please contact us by calling us on 020 7387 2032 or by completing our online enquiry form here.