Now is the time to invest in buy-to-let property, before availability starts to shrink and prices start to rise, an expert has said.
According to Stuart Law, chief executive of Assetz and an expert from the Property Investor Show, investors need to move quickly because they "have little time left to snap up bargain buy to let properties before stock shortages and rental growth begin to drive prices upwards."
Contrary to claims that there are thousands of unsold properties from developers in a number of major UK cities, new build bargains are in short supply, Mr Law believes.
He expects supply to remain restricted for at least 10 years, pushing prices up, and that investors who buy now therefore have the opportunity to take advantage of a 10 year rental boom.
"The return of buy-to-let and the limited supply of product is no longer just a prediction but a cold hard fact," he said.
Estate agent King Sturge has reported that in Leeds, 92 per cent of rental property is occupied at any one time, and tenant registration is up 47 per cent according to a report from Winkworth estate agents, which also found that the number of rental properties on the market is less than half what it was last year.
The rental market is being flooded by would-be first time buyers who are unable to raise the deposit to buy, so the number of rental properties on the market is shrinking, Mr Law explained, adding:
"This demand is further exacerbated by almost no new housing stock entering the market as a direct result of banks no longer willing to fund city developments. This is likely to remain the status-quo for at least the next ten years when banks may begin to re-consider lending on these types of projects again!"
Therefore, he predicts, investors will see a 10 per cent rise in rental growth in the next three years, as demand surpasses supply, and will continue in this way for 10 years.
"Currently, investors can expect to see yields of around seven to eight per cent. For example, a two bedroom property in Manchester that is currently being rented out at £700 per month is forecast to be up to £950 in as little as three years."
© Fair Investment Company Ltd
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