Number of buy-to-let investors breaks through 1.75m barrier, though fears of a slowdown in the second half of the year persist
The number of buy-to-let investors in the UK has broken through the 1.75m barrier for the first time, up by seven per cent over the last year.
Not only are numbers of investors up but they're making more money as well.
The net income – rental income minus all costs – of these investors increased by eight per cent over the same period to £14.2bn, up from £13.1bn last year, according to estate agent ludlowthompson.
It's thought that expectations of an interest rate rise being pushed back to December 2019 will mean the sector is able to power through the increase to stamp duty that came into affect in April.
Read more: London to face biggest changes from buy-to-let lending clampdown
However, last week specialist buy-to-let mortgage lender Paragon warned the three per cent stamp duty hike meant its pipeline for the second half of the year was markedly lower than in previous years after investors rushed to finalise before April.
“We saw a surge in applications from people trying to beat the stamp duty hike and as a result expect the second half to be weaker than usual,” chief executive Nigel Terrington told Morning Wire
Recent research from YouGov shows that currently 30 per cent of London’s population live in properties in the private rental sector, up from 13 per cent in 2006.
Capital growth for residential property in London has reached 13.9 per cent, figures based on data from Land Registry for March 2016 showed. Meanwhile, the FTSE 100 fell by 8.8 per cent over the same period.
Read more: Buy to let investors are feeling the heat
Stephen Ludlow, chairman at ludlowthompson, said:
With no interest rate rise on the horizon and an ever-rising demand for rental property, investors are still flocking to London’s private rental sector.
Investors continue to be drawn to the buy-to-let market as the returns routinely outperform those of other investments.
Buy-to-let investments are a highly popular alternative to the volatility investors often risk when investing in the stock market.