5.4 million privately rented properties in the UK
By Roxanne James

UK Buy-to-Let Assets Yield 17% in 2014

The British buy-to-let market (BTL) is set to boom in 2015, as thousands of pension savers step on to the ladder when they become able to spend their pension pots as they wish from April this year.

According to analysis from Savills, buy-to-let property appreciated nationally by a staggering 17% over the past 12 months, as more households switch to the more affordable private rented market.

Britain's private rented sector experienced a surge in 2014 and the trend for rental in preference to home-ownership is set to continue its rise, with 1.1 million renters expected to join the market over the next five years.

There are currently around 5.4 million privately rented properties in the UK, an increase of 1.2 million since 2009. The principal reason for the level of growth in this market has much to do with affordability issues, particularly those faced by first-time buyers.

Whereas in the past, it was considered downmarket to rent rather than own a home, British home-seekers are increasingly following the example set in other countries such as Germany and France where renting is the norm for the majority.

The reason many investors want to secure buy-to-let property assets is that demand for rental properties is set to boom further in the next five years. This is in response to two things: Firstly, many would-be first-time buyers are unable to meet mortgage requirements and secondly, the millennial generation is more likely to choose rental accommodation over purchasing than any other past generation.

Savills research shows that homes owned using mortgage finance have fallen by almost 800,000 over the past five years, reflecting the significantly improved sentiment for rental.

As Britain's core of private renters continues to expand in the next five years, buy-to-let properties in the UK will remain a key area for high-yielding opportunities with consistent returns.

 

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