Saturday, October 24, 2020
Landlords

UK private rented sector still worth investment

Despite tax and regulatory change, the private rented sector in the UK is still a worthwhile investment, shows new research

Despite tax and regulatory change, the private rented sector in the UK is still a worthwhile investment as a new research shows that the buy to let market is attractive for a variety of reasons.

Even the so called accidental landlords are finding it attractive to stay in the market and many of them are even adding to their business by expanding their portfolio. These include, for example, those who enter the sector after inheriting a property.

One of the main reasons for staying is that the private rented sector makes up a large part of the UK’s lettings market and it is likely to continue to be so as there is a shortage of houses.

Indeed, new research from Foundation Home Loans shows that 17% of existing landlords plan to increase the size of their portfolio in the next 12 months and a growing number overall are accidental landlords.

Some 14% of existing landlords describe themselves as ‘accidental’ due to a change in circumstances such as marriage or relocation while 9% inherited the property that they let out.

However, 23% of all landlords became a landlord exclusively for financial reasons as they considered it to be an attractive investment for funding their post-retirement stage, with 21% planning to use earned rental income to fund their expenses after retirement.

Some 21% described themselves as full time landlords and do not have another job, while 19% say that they have a part time job and 60% are landlords while having a full time job. The greatest proportion of full time landlords who do not have another job are located in London.

Marketing director at Foundation Home Loans, Jeff Knight said, with so much regulation introduced into the buy to let market in the last few years, it could be easy for those who are unplanned landlords to make a swift exit rather than stay and navigate the red tape.

No matter how they found themselves owning rental property, it’s clear landlords are interested by the buy to let market for a variety of reasons and objectives, financial or otherwise.

Knight added that considering the rental sector forms an increasingly important part of the housing mix, landlords need to be armed with the right advice. The findings indicate plenty of the accidental landlords are looking to expand their portfolios and remain invested in the market, which will ultimately have a positive impact on quality and choice for renters.

Important:
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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