Now that the general election is over, the UK buy to let market looks set to normalise once again.
House Prices Up Outside London
House price increases outside London are likely to outperform those in the capital for the first time in six years, according to the Centre for Economics and Business Research (CEBR).
By 2016, however, property prices in the capital are predicted to forge ahead once more, increasing by about 2.7pc, compared with 2.3pc across the country generally.
But the CEBR said underlying factors including economic growth and a lack of housing options will also lead to greater price rises outside the capital, where the average price is £193,000.
In 2014, house prices in London increased by 17.4pc, while property values across the UK generally increased by 10pc. But buyers have started to look outside the capital, seeking better value for money.
The strength of the sterling against the euro has also been a factor in decreasing demand from overseas buyers looking to buy within the capital, the CEBR said.
Huge Growth In Privately Rented Property
The buy to let market is also set to expand rapidly over the next few years due to lack of new properties being built and ever growing tenant demand.
Buy to let in numbers
22.7m residential dwellings in England;
4.1m privately rented
3.8m rented through local authority or social housing organisations. (Source: English Housing Survey)
In 1996, there were two million privately rented homes, today there are 4.1m. (Source: Department for Communities and Local Government)
Rents On The Rise
New findings also from the HomeLet Rental Index, show that rents across the UK are 10.2% higher than a year ago. The average rent on a tenancy signed in the UK during the first quarter of 2015 was £902, compared to £819 for tenancies signed during the first quarter of 2014. Rents are higher in every region of the UK except Wales compared to a year ago.
Excluding Greater London from the findings, average rents across the rest of the UK are 6.7% higher than a year ago, which is the highest rate of annual growth recorded by the Index since its inception in 2008.
The strongest growth took place in the South West of England, with rents 13.7% higher in Q1 2015 compared to Q1 2014. Outside of Greater London and the South East, the South West of England has the highest rents in the UK, with the average rent now standing at £851 per month.
The HomeLet figures for the first three months of 2015 have seen steady growth in rent prices, with 10 out of 12 UK regions showing price rises compared to the previous month. Figures for the three months to March 2015 show an average UK rent growth of 1.5% when compared to the three months to February 2015.
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