Why Now’s the Perfect Time to Become a Landlord

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Over the past couple of years the UK’s property market has transformed, with London’s housing bubble now expanding to reach the rest of the country. Mortgage lending and transaction volumes have both increased rapidly whereas the cost of these mortgages has remained at record lows. Is it time you joined the housing market as a landlord? It appears as though it might be. Last Year’s Housing Boom In the past year, the price of an average house has risen dramatically from £162,262 to £174,556 (an increase of 5%). Some estimates, such as the one offered by Nationwide, actually place this figure around 7.7% but, no matter which estimate you take, the increase is staggering. Total lending levels have increased rapidly; although they only remain at about half of the pre-crash levels, the number of transactions exceeded 1 million in 2013. Over the same period, the average rental price went up by 4.2% with almost all of the UK’s regions reporting an increase that saw landlords receive a 6% yield throughout 2013, a figure slightly down from the 6.7% they had received in the previous year. The Year Ahead By 2018, the Office for Budget Responsibility (who advises the Chancellor George Osborne) believes that house prices will rise by 27%. As part of this, many now believe that landlords will rapidly grow their borrowing in order to expand their business. Next year alone, some landlord mortgage brokers believe that they will see a 25% upturn in their business as landlords look to capitalise on these impending price rises. No Easy Money: How to Turn a Profit Of course, conditions may be prime for making money in the rental sector, but no profits are ever guaranteed and you have to be smart with your money, investing wisely. Now may be the perfect time to become a landlord and make money on the side, but never rush into buying a property. Instead, stay calm and monitor trends. Likewise, even when you’ve purchased, carefully consider the amount you’re selling for and how you prepare your house for a sale. The rental sector is now so large that specialist companies such as David Phillips provide specialist landlord furniture. Never delve into something without the research and remember, if you do buy furniture, you’ll have to charge more rent without making it unaffordable. With this in mind, is now the perfect time for you to become a landlord? 

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