To buy or not to buy?
Average rental prices across England and Wales rose to a record £758 per month in October, according to LSL Property Services. Nonetheless, the tenancies are rising rapidly; this October the number stands at 7.4 per cent higher compared to the same time last year, while tenant arrears are at their lowest since 2008, according to the Council of Mortgage Lenders survey.
If the trend continues, there is good income to be made for a buy-to-let investor: an average of 14.5 per cent over the next year. However, not all areas can boast such increases; rents in East Midlands have taken a turn downwards instead.
Despite this, it is arguably still cheaper to rent. The popularity of buy-to-let is skewing the balance between availability of properties to buy versus those available to rent, the former being in short supply. However, if interest rates, which are currently at an all time low, go up to a more normal 4-5%, rents may have to follow suit.
Those eager to join the ranks of buy-to-let investors are naturally deterred from London by its frightening house price spikes, and are seeking more lucrative deals and yields. As we reported last week, the new better connected Britain, in terms of roads, rail and broadband, will mean better employment opportunities outside London, as well as enable commuters to move even further away from the beloved City. The Telegraph has sniffed out the best regional spots to invest now.
Meanwhile, the premiums that property prices demand around best schools (as much as 170 per cent) and Universities can only mean one thing for the canny buyers investing in those areas – profit and guaranteed stability of income. University applications have increased 2.7 per cent this year despite the higher fees. Equally, higher rents are not intimidating the students, many of whom are international, with wealthy parents… if one may point this out without sounding unethical.