Shortage of rental properties – but opportunities spring up for landlords
The UK is now suffering from a severe shortage of rental properties, a situation which has spiralled in the past 6 months. Whilst the shortage is nationwide, it is the south east which has been worst hit.
The spring months would normally see a rise in rental properties coming onto the market, but the situation has been deteriorating for some time now. It is argued that the government should have done more to get people to invest in buy-to-let properties in the recent emergency Budget, to avoid the situation in which so few properties are available that tenants are unable to find affordable rental homes. However, the Chancellor did little to incentivise investment in the private rental sector, in fact the rise in Capital Gains Tax may actually discourage potential landlords from investing.
Furthermore, the cap on housing benefits and stricter rules about the type of property for which you may claim will make things harder for those on lower incomes – especially as rentals will rise due the disparity between supply and demand in the rental market. This, combined with low construction levels means that instead of the housing market getting back on its feet it may actually lead to people not being able to get the homes they can afford.
However, there is light at the end of the tunnel as recent figures revealed that the number of landlords planning to buy new properties to rent out is rising, while mortgage lenders are starting to offer better buy-to-let deals. So slowly, the situation should ease as these changes filter through.
If you are tempted to purchase a property for buy-to-let (and on the face of it this is a good investment given the current ludicrously low interest rates for savers), make sure you do your sums. Allow enough money for the purchase, renovations works (if they are required), furniture and soft furnishings – and make sure you take professional advice on the insurance as buy-to-let properties require specialist insurance policies. Go to a company who can provide you with sensible advice and who can point out all the things you need to make sure are covered. As a landlord you will have legal responsibilities and you are, in essence, running a business so make sure you do things properly. With the correct insurance in place you can rest assured your new property is as safe as houses!
Contact Westhill Insurance Services, today.