Hello there! Welcome to the new and–hopefully–improved Brokers Direct blog. I want to open my first post with a question, the same one alluded to by the title of this post:
Have you noticed that there are more and more landlords around?
In recent months I’ve seen several friends and relatives climbing on the buy-to-let ladder, and I’m not the only one. In 2014, The Guardian reported that one in five homes are now owned by private landlords and that figure is set to rise in the years to come.
At least I know I’m not going crazy, there is a buy-to-let boom taking place. But what does it mean for those of you out there who already own one or more properties? Well, it means a few things.
A bit of a no-brainer this one, but probably worth pointing out regardless. More people looking to get involved with buy-to-let inevitably means more interest in properties, more phone calls to deal with and more offers. This means that the best properties will inevitably be snapped up even more quickly than they have been in the past.
A natural consequence of increased competition, one that has first-time buyers everywhere shaking their fists, is that prices are going up. When people are viewing property as an investment, they often have plans and a budget to upgrade any flawed aspects of it.
Such buyers are more likely to be loose with their money; securing a property with an offer of an extra five or ten grand, a substantial sum to a first-time buyer, may not mean all that much to an investor if they’re confident they can recoup it down the line.
Well, maybe. A higher number of private landlords should mean that renters have more choice and can afford to be more picky–that’s how it’s supposed to go when supply goes up and demand stays the same. However, young people are finding themselves renting for longer because they can’t afford to get on the property ladder.
In part that’s due to private landlords snapping up affordable property to let it, but there are other factors (zero hours contracts, the housing bubble; if you read the news you already know about all this stuff!) in play too. The result is that demand for rented properties is on the up as well.
If you’re already on the buy-to-let ladder, this is all good news. Even with the government’s promises to build more affordable housing and the Help to Buy scheme, demand for rented properties isn’t going to just dry up.
If you’re still trying to answer the question ‘should I buy a property to let it out?’, the answer remains–depending on your circumstances, of course–a big fat yes. It’s not a decision to be undertaken lightly, and it can result in some hassle if things go wrong, but in the vast majority of cases buying to let is still a much better decision than letting your money just sit in the bank.