The UK Rental Market – Why now is a good time to become a landlord, or to extend your property portfolio

Pearson Ferrier Director Mitchell Pearson offers his insight into the current climate of the UK property market.

Whilst many predicted a slowdown in the property market and a rise in interest rates by the end of 2021, the fact remains that this didn’t happen. The market dynamics remain strong for now and some analysts are expecting buoyant trading conditions until 2025. As we move into the first quarter of 2022, the market is providing a good number of prosperous buy-to-let opportunities.

Here’s why… 

1. With a record number of tenants seeking quality living accommodation, rental prices are currently much higher than they have been in recent years. 
2. We have seen some of the fastest growth in property values within our region over the last 2 years, meaning now could be the right time to consider refinancing your existing buy-to-let property to take advantage of the increase in value and of the fabulous rates on offer. This would enable you to enjoy some of the ‘value’ currently locked away within the property or re-invest and use it to buy a second or third investment home.

The opinion that’s shared amongst the team at Pearson Ferrier is that now is absolutely the time to take the leap and make your investment into property – whether that be with your first buy-to-let purchase or your fifth. Interest rates have remained extremely low, which in turn is creating some very attractive mortgage deals for buy-to-let landlords, but they won’t remain low forever, so it’s the perfect time to take advantage of the fact that money is currently very cheap to borrow, and you can lock into some really great fixed rates for the next 5 years. 

It’s safe to say that we’ve seen some incredible changes over the last twenty years or so within the buy-to-let industry. The Government has changed the way landlords are taxed and mortgage interest relief is no longer able to be used to offset against income tax. As a result, more and more landlords have set up limited companies to hold their rental assets and to take advantage of better tax benefits. 

In addition, landlords have been forced to carry out repairs in a more timely fashion; EPC rules are demanding that every property reaches a certain score, and it is now necessary for landlords to carry out an Electrical Installation Condition Report (EICRs) prior to a tenant moving in. These financial burdens may have weighed heavily on landlords, but they’ve also created an improved quality of rental accommodation, which in turn has led to increased rental prices. There’s also the fact that resident tenants are now more likely to stay in a property for a longer stretch of time, meaning there are fewer void periods and less expense overall for the landlord. The net result is that a landlord’s rental investment is better protected, and consequently they should enjoy future growth in capital value.

With an ever-expanding property portfolio and over 25 years of industry experience, Pearson Ferrier is one of the UK’s leading independent residential lettings and property management specialists, and we’re here to be the first point of contact for your tenant, taking care of all paperwork and maintenance work so that you can focus on your other responsibilities. We’re also here to call upon whenever you need us, for expert advice on the local market, or for further information about current rental property regulations. 

If you’re looking to make your next investment, now is the time to do so! Contact our team today so that we can get the ball rolling for you.