Landlords are taking advantage of low mortgage rates to expand their portfolios and are reaping the rewards, according to new figures.
Lending to landlords has surged again, according to the Bank of England, as overall mortgage lending grew by 23% in the second quarter – the fastest rate since the Bank’s index began in 2007.
And rental accommodation continues to be a potential goldmine for property investors, with average monthly rents continuing to rise.
The average rent rose to its highest level in two years during August – £867 per month – according to Countrywide’s Monthly Lettings Index.
Landlords achieved yields above 6% in the North of England, in the Midlands, and in Wales, the index showed.
Demand Exceeding Supply
The Government’s intervention to support the housing market has raised concerns that demand is exceeding supply, which is pushing house prices upwards.
The latest surge in buy-to-let lending is raising concerns that equivalent conditions will tighten the private rental market in prime areas.
With demand continuing to outstrip supply for family properties, tenants are under pressure to land the right property, said Nick Dunning, director at Countrywide.
"Currently there is a particular lack of family-sized properties available to rent, especially in the South of England," he said.
"With 4-5 tenants vying for every property, tenants need to act quickly."
James Booker
Which4U
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