Landlords and those looking to potentially invest in the buy-to-let market will be pleased to know that 2014 saw strong growth in the rental market across the UK. Nine of the 12 UK regions saw the price of renting a home rise throughout the year, and for those investing in the capital, the good news is that Greater London was among the very best performing areas.
According to the latest Home Let Index showed that at the end of the November - the latest confirmed figures - the average rental price nationwide was £874, which was an 8.7 per cent increase over the month before and a large 11.7 per cent growth when compared to a year earlier.
Greater London was among the very best areas for buy-to-let investments in 2014, with the report showing that rental prices were 11 per cent higher than they were a year before, and well in excess of £1,000 per month. Only Scotland showed stronger levels of growth last year.
What does the future hold for buy-to-let?
According to Home Let Index, these latest figures show how admirably the property market is performing, and predicts that this health is something it will carry into this year.
The outlook for the private rented sector remains positive for several reasons, the pace of house building is unlikely to have a significant effect on the supply of property to buy or to rent in the short term, high house prices, and a mortgage market where lending criteria remains constrained, are combining to ensure that the demand from tenants needing rented accommodation remains strong," said Martin Totty, chief executive officer of the Barbon Insurance Group of which Home Let is part.
Across the next few months, political uncertainty will be likely to lead more people to rent in the lead up to the election. When this is combined with the likes of generation rent and the constrained mortgage lending levels, landlords should see real strength in the short term.
Looking even further ahead, reports suggest that by the end of the year - most likely in October - the BAnk of England may be ready to raise the interest rate at long last.
If predictions are to be believed, the central bank will lift the base rate from its historic low of 0.5 per cent to 1.25 per cent. This will immediately make mortgages less affordable, which will have the knock-on effect of there being less buyers around and more people looking to rent, which will make yields even better for landlords as we head toward 2016.