2013 has been a landmark year for buy to let (BTL) and the private rented sector (PRS) in the UK. The Bank of England reports that BTL lending has increased by 42% between Q3 2012 and the same period this year. And rent levels have increased by 4.2% over the year to November, according to Countrywide. This increase is actually less than that in house prices, suggesting landlords are also still working to keep rent levels as reasonable as possible. While things look good for landlords now, here are a few brief thoughts on what’s to come (and what to keep your eye on) in 2014:
Lending: Rentify’s newsletter reported predictions for a 25% increase in BTL lending in 2014 last week. The Council of Mortgage Lenders has now also predicted an increase of £25 billion for all lending, including BTL, next year.
Expanding your portfolio: A survey by Mortgage for Business suggests 57% of their customers wish to expand their portfolio in 2014. The figure was 66% for those already owning more than 10 properties. This ties in with the significant increase in bridging loans that has been seen in 2013 (up 25%). If you are thinking of expanding, the conditions at the moment are certainly favourable.
Mortgage Rates: The changes to Funding for Lending may negatively impact on the favourable rates that BTL is currently experiencing. However, this is has yet to be seen and recent comments from the Governor of the Bank of England suggest that interest rates (traditionally tied to mortgage rates) could be set to stay low. This would be good news for BTL investors.
Immigration Bill: This is one genuine worry, although 2014 will probably only see a trial period with full roll-out delayed until after the next election in 2015. Still this is something landlords will have to keep their eye on and it’s a good idea to get clued up. Rentify will have all of the information you need and you can also take a look at the Bill here.
Welfare Reforms: Although behind schedule, reforms will continue to be rolled out across the country. Understandably they are a major concern for many but it should be emphasised that blanket bans on Housing Benefit recipients are not necessarily the best step forward: it will always depend on individual circumstances. Rentify urges an open dialogue with tenants and careful consideration of the large market you would be closing your property to.