It's good news for property investors over the coming years, according to predictions from the Centre for Economics and Business Research.
It has been suggested by the Centre for Economics and Business Research (CEBR) that although there may be some turbulent times ahead, the buy to let market will still present investors with lucrative opportunities.
The CEBR claim that although many landlords have seen the effects of recent changes such as the rise of stamp duty and changes to tax regulations for landlords, it is believed that due to the continuing rise in both house prices and rental rates, the market will remain robust and continue to be a profitable option for both lenders and investors.
Forecasts from the CEBR suggest that landlords could see a slight fall in yields due to house prices rising at a faster pace than rental rates, with predictions of overall yields at an average of 3.5% in 2027.
In addition to this, it is expected that across the next 10 years the number of UK homes within the private rented sector will rise by 7% to 28%, meaning almost a third of homes in 2027 will be rental properties as the demand for rental accommodation only continues to grow.
Managing Director at property specialists, Leaders, Allison Thompson, recently commented on the results of this research and mentioned how property as an investment has outperformed a variety of investment options over recent years. She said “Balancing risk and reward has always been the key to a successful investment - and we believe the rewards of investing in property will continue to significantly outweigh the risks.
“In recent years, property has outperformed a host of other major investment types - including stocks and shares, gold and savings - and there are plenty of reasons to be optimistic that this will continue over the next decade.
“Should yields decrease as the study suggests, we remain confident this gap will be bridged by rising house prices, which allow landlords to benefit from significant capital growth when the time comes to sell.”
Over the past year, many investors have taken a look at their portfolio due to their concern surrounding the economy following the Brexit decision and more recently the election. However, many property experts believe that while the market isn’t bulletproof, the current lack of supply will keep the property prices stable.
Allison Thompson went on to say “Buy-to-let has provided a high return on investment for thousands of landlords in recent years and, providing new challenges are suitably negotiated, fundamentally remains an extremely strong and attractive proposition.
“The combination of high tenant demand and rising rental prices ensures it will continue to deliver the results ambitious investors expect.”
