Today’s figures from the Land Registry’s House Price Index show an annual price increase of 7.2%, taking the average property value in England and Wales to £175,653. This is just £5,789 below the peak of November 2007.
But as the market recovers and more people flock to property as an investment choice, Platinum Property Partners (PPP) warns existing and potential landlords not to forget the tenants.
Steve Bolton, Founder and Chairman of PPP comments: “The latest data from the Land Registry clearly shows that there are excellent capital gains to be made in the residential property market as house prices start to level. This is especially the case whilst interest rates remain low, making potential returns attractive in comparison to conventional savings.
“However, with the 7.2% annual rise in house prices far outstripping the Bank of England’s forecasted 1.25% growth in wages this year, many aspiring buyers will still struggle to get on the ladder. With that, the rental sector is set to experience sustained levels of strong demand – particularly for well-maintained and affordable accommodation. Making more efficient use of the current housing stock while the development of new homes is few and far between is a pragmatic approach to relieving the pressure. Utilising buy-to-let models such as Houses in Multiple Occupation (HMO) for professional tenants is an excellent way of doing so.
“It’s crucial that existing – and prospective – landlords are not blinkered by the eye catching capital returns at the expense of Generation Rent. High quality, low cost rental accommodation is what is needed and buy-to-let investors should make every effort to maintain such standards and fulfil a requirement, in addition to generating attractive returns.”
