February Market Review | Why Investor Confidence Is Growing Again
The recent performance of the private rental sector suggests that although market conditions are becoming more favourable for investors, it is taking time for those changes to percolate through and produce measurable improvements in capital or rental gains.
According to most recent indices, asking prices and asking rents have been rising more slowly than the rate of inflation. There have, as ever, been pronounced regional variations and, on both measures, the more affordable regions have generally continued to outperform those further south. But at the national level, it’s clear that positive economic trends – real-terms growth in earnings, falling inflation and a reasonable expectation of lower interest rates – haven’t yet translated into faster growth in rents or average values.
The good news is that gross yields have remained very good across virtually all parts of Britain. In terms of its ability to produce a regular, inflation-beating return, residential property is still proving its worth. Moreover, as affordability continues to improve, so investors should see a gradual return to real-terms growth in rents and capital values.
It’s against this background that we’re seeing evidence of improved landlord confidence, more applications for BTL mortgages and a general upturn in market activity.
Darren Bennett
Managing Director
If you have any questions about any aspect of property investment, please call us today