Landlords in the UK are seeing real positives in their investments as rental rates are increasing at their fastest pace for more than half a decade, according to a new report.
In the past couple of years, we've seen the cost of renting a property hit new record highs time and again as demand increases from tenants. Many now prefer renting to buying homes, and this has meant that landlords have been able to take advantage, getting themselves a strong return on investment with price increases.
However, at no point during this boom have rental prices increased at a faster rate than they currently are, according to Your Move and Reeds Rains. The latest buy-to-let index from the companies has shown that the average nationwide rental price now sits at £774 per month.
In the last year, it said, the price had risen by some 4.6 per cent. This is the fastest annual rate of increase seen at any time since mid 2010, when the rental market was going through a period of health buoyed on by the struggling property market as a whole in the aftermath of the financial problems being faced by the UK.
This is a real positive for landlords, especially at a time like the present. While 2010's rental prices were being pushed on by the fact people were being forced to rent because they could not afford to buy, in 2015, demand is high even when more people are buying houses. This is down to the fact it has become a preference rather than a necessity for many young people in particularly.
What it means is that the rental demand should survive in the long run, allowing investors in the buy-to-let market the chance to get strong returns over a number of years without fear of any significant fall in prices or rise in vacancies.
Between March and April this year, there was also a strong growth in rents. They climbed by some 0.8 per cent in this period, which was the fastest month-on-month increase recorded since September of last year. Adrian Gill, director of Your Move and Reeds Rains, said this was largely thanks to the growth in wages.