The number households renting privately has been steadily on the rise and with this comes an increase in private landlords. According national statistics, 19% or 4.3 million households rent privately now as opposed to 11% in 2004 and it is estimated there are 1.75 million landlords of which 89% are private individuals.
Buy to Let is vital for the private renting market. This is set to continue as private renting is no longer exclusively a temporary solution for people saving for a housing deposit but a longer term option too.
People are now choosing to rent for a much longer period of time as the opportunity to save for a deposit for a mortgage and paying for rent simultaneously becomes too difficult to manage. For students and young professionals the renting solution offers the much needed flexibility, the trend is also seeing a lot of young people preferring to live in their own homes rather than with their parents.
There are numerous contributing factors to the increase in buy to let properties including the ratio between income and house prices and the lack of housing stock. Since the recession during the financial crisis in 2009, house prices in the UK have risen by 32%, far outstripping the pace of wage growth – nominal earnings have only risen by about 14% in the same time.
For years, the pace of building new homes in the UK has not kept up with rising demand. Not enough homes are being built where they are needed putting a strain on house prices in those regions. The ratio between earnings and house prices, has led to a situation where a large number of people cannot afford to buy their own home.
In the latest report from Shawbrook Bank issued this week, London and surrounding areas are seen to have the largest number of buy to let properties at around 25%, which is to be expected, but the South East isn’t far behind with around 15% and at the other end of the scale North East is showing around 2.5% and Northern Ireland 2%.
The majority of buy to let properties are flats and terraced properties usually used for students and small families. The smallest category of building used for letting are bungalows at around 2% of the property market.
For someone who is buying a property it is imperative you chose an insurance provider that can accommodate your requirements whatever the circumstances.
We can cater for both commercial and residential properties let to all categories of tenants and are able to deliver a range of options for short and long term unoccupied buildings.
For a quotation please call our team on 01795580800