It was revealed in September that the average age of first time buyers had risen to a record high of 36, leaving the private rented sector with a massive pool of tenants. Buy-to-let lending has increased steadily throughout the year, culminating in the £5.9 billion of new lending value recorded in the third quarter – the highest quarterly amount since 2008.
With the growing demand for BTL lending, a number of new lenders have sprung up, and in a bid to appeal to more of the market, landlords were pleased to see that some large lenders began to relax their criteria for lending.
Yields were high throughout the year, particularly in the student market. Leeds was found to be one of the most profitable! Average returns on rental properties across the UK is 5.3%. Although ‘average’ anything in the lettings market can be deceptive, yields across the sector are generally strong. According to Paragon, landlord confidence is high, with 38% feeling optimistic about their portfolios.
Happily, for both landlords and tenants, the number of tenants in arrears has fallen dramatically since the start of the year. A recent survey found that a record low of 6.6% of all rent was late or unpaid in November!
Home ownership is expected to grow due to the government’s Help To Buy scheme, but it is nonetheless predicted that over a million extra households will be in rented accommodation by 2018. For landlords, it should prove to be a Happy New Year for many years to come!