Buy-to-let property in the UK seems to be the order of the day, as more and more investors look to receive returns from this buoyant market.
According to a new report from mortgage lender, Paragon, 1 in 5 homes in the UK are now owned by landlords and that number is set to increase by a further million over the next 5 years.
The research shows that 5 million properties are currently rented out by around 2 million private landlords.
This equates to 18% of households renting from the private buy-to-let sector.
Due to the high demand across the country for rental property, buy-to-let investment has become increasingly popular due to its potential to generate a passive monthly income and – in some cases – strong capital growth potential.
Low interest rates have led to rising applications for buy-to-let mortgages which have helped awaken the market. Paragon Mortgages stated that Q4 2014 will end with a 6% quarter-on-quarter rise in activity.
It appears that there is a buy-to-let boom in the UK and it doesn’t look like the market will slow down anytime soon.
“…the creation of buy-to-let has very much been a force for good. It has helped to shape a private rented rector that is fit for purpose and provides choice, value and flexibility for tenants,” a spokesperson from Paragon told The Telegraph.
Rising investor demand for buy-to-let properties will no doubt have a knock on effect on house prices.
According to Zoopla, the average price property price in the UK is now £267,834, up 8.56% when compared to figures from last year.
Investors looking to get the most out of their buy-to-let investment should look for opportunities which are either below market value or are under construction, as these types of property offer a discounted entry onto the property market. This type of investment may offer stronger capital growth potential in the mid-to long-term.