Figures from Homelet show that the average rent for a UK home is now £806 per month. This is a record according to the Homelet Rental Index published by the credit referencing agency. In August the average rent went up by 2.1% on the month before. In London the average rent being paid by tenants is a whopping £1,272 per month.
Since the credit crunch it has been difficult for people to obtain a mortgage and so many have turned to the rental market but these figures suggest that even renting a home may be out of the reach of young people without good jobs. That raises the issue of the sustainability of rents at this level. Landlord insurance clients are probably pleased to see rising rents but will these continue. Another issue of great importance to buy to let landlords is what is happening to house prices and what is likely to happen over the next few years. It is great o have a good income from your investment but not so attractive if the capital value goes down.
If you are in well paid work and can raise the deposit it makes sense to look at the options for buying; although the evidence suggests that people are waiting until they are well into their thirties before purchasing their own homes. The Office of National Statistics says that the average first time buyer is now 37 years old.
One of the most important aspects of a buy to let purchase is doing your research to make sure you are buying a property that is likely to give you a decent return, after all the maintenance and other bills are taken into account. Is it in a good area for renting where there is a supply of likely tenants? Will the repair costs eat into your profits? A void period with no tenant and an unexpected bill for repairs can make your figures look very sick indeed.