At the beginning of the century the majority of people lived in rented housing roughly 90%, by the 90’s this figure had dropped to just 7%. This was down to rising wages and the availability of mortgages. Renting privately was viewed as a bad investment as opposed to buying a property.
Currently the rental sector accounts for approximately 28% but the demand for new property continues to rise. Also the recession has caused widespread unemployment. More people are becoming self employed or are forced to work on a contractual basis. Not only this but the rising costs of being a student with loans and tuition fees meaning first time buyers wait longer before they can purchase. All these factors will contribute to a growing buy to let market.
The 1988 Housing Act brought about reforms in the buy to let industry with the introduction of the ‘assured shorthold’. The 1996 Housing Act introduced further changes that meant letting was more attractive to tenants.
What does the ‘assured shorthold’ mean for buy to let investors?
Nearly all residential tenancies are now assured or assured shortholds. The benefit of the assured tenancy, as opposed to an assured shorthold, is that the tenant is not able to challenge the agreed rent before the Rent Assessment Committee as you are able to do in the first six months of an assured shorthold.
Investing in property and letting it out is a great opportunity to make money compared with investment in shares, the rent equates to dividend and the growth to the capital value. While shares can go up and down, rent and property values go up in line, or ahead of, inflation. Property investment is very sound, not plagued with the cyclical nature of the stock market. If you are interested in buy to let investment register for the latest properies today.
