Latest News Confirms Property Investors Are Winners
When you invest in a buy-to-let property, you make money by the growth in the property’s value and from the rental income you receive. To improve your standard of living, you want to grow your capital and your income faster than the inflation rate. Despite all the uncertainty in the world, and all the negative news surrounding Brexit, buy-to-let property is still delivering inflation-proofed returns.Rental Income Rising Faster Than the Inflation Rate
Like average earnings in the UK, rental prices are rising faster than inflation. The latest Consumer Price Index (CPI) reading in the UK is that prices have increased by 2.0% in July 2019. This is bang on the Bank of England’s target. According to Homelet’s Rental Index for July 2019, average rents are outstripping inflation. Across the UK, rents are 2.3% higher than a year earlier. Rents are rising fast in London, with the average rental price in the capital now standing at £1,665 – 3.1% higher than last year. However, within the capital some boroughs are performing better than others. For example, rents in Westminster have jumped by an incredible 9.5% over a year, while in Camden they have fallen by 3.4%. Regionally, buy-to-let landlords in the South West have done best, with a 4.5% annual rise – the highest in the country. However, every region in the UK saw rents rise. In Scotland, rents are 4.3% higher on a year ago. The rental price increase in Wales was the same. The lowest increases came in the North East (0.8%) and Yorkshire & Humberside (0.9%). In seven of the country’s 12 regions, rental prices rose at or faster than inflation. Across the country, the average rent is now £959 per month. That’s an increase of around £22 per month from this time last year – around £264 more each year.Property Prices Are Forecast to Rise Faster Than Inflation
Remember all those doom and gloom forecasts of a collapse in property prices after the EU referendum? They haven’t happened. The closest we’ve come to a fall in prices is the recent June and July numbers – both RICS and Halifax have reported average price falls of around 0.2% in July following a 0.4% fall in June. Despite the falls of the last two months, Halifax posts the annual price rise in July 2019 at 4.1%. That’s twice as fast as inflation, and faster-than-average earnings growth of 3.9%. Doomsayers will point to the last two months’ falls as indicative of a reversing market, but this short-term trend looks to be about to change. According to the latest from reallymoving, the UK’s largest provider of instant quotes for home moving services, house prices in the UK are about to bounce – hard. It forecasts that average house prices will rise by:- 2% in August
- 4% in September
- 1% on an annualised basis in September 2019
Tags
buy-to-let, Inflation rate
You may also like
A Tenant’s Guide to Preventing Condensation and Mould in UK Properties
As a tenant in a UK rental property, it’s important to understand your role in preventing condensation and the resultant mould growth. Condensation occurs when excess moisture in the air settles on cool surfaces, and if left unchecked, it can quickly lead to unsightly and potentially hazardous mould. By following these simple tips, you can
Read More