The total number of buy to let landlords in the UK has hit a record high of 2.5 million, according to research by London estate agents Ludlow Thompson.
Over the last five years there has been a 27% increase in the number of landlords, from 1.7 million in 2011/2012 to 2.5 million in 2018.
The average number of properties owned by but to let investors is 1.8. Although government changes have increased costs through higher stamp duty and tax relief reduction on commercial mortgage interest payments, Ludlow Thompson believes the buy to let investment business model remains strong.
Though house prices in London are high and rental yields are lower than they once were, landlords that have owned property since 2000 should have seen an average of 9.9% annual returns.
In many areas, including London, demand for rented property is higher than supply. This keeps rent levels high. Stephen Ludlow, the chairman of Ludlow Thompson. says that, with workers being increasingly mobile, they need rented accommodation which makes the private rented sector vital for economic growth.
“The rising numbers of landlords shows the enduring appeal of buy-to-let, particularly in London.”
“The long-term picture for the buy-to-let market remains strong. As a ‘London-leaning’ Brexit looks more likely, a final deal will focus on strengthening the appeal of the capital as a go-to destination for overseas professionals, graduates and students alike.”
Ludlow’s optimistic forecast is that wages will rise, and this will lead to increased rental values.