Buy to let landlords have enjoyed superb returns of nearly 1,400% since 1996, beating all other forms of investment, according to a report by Wriglesworth Consultancy for peer-to-peer lender, Landbay.
£1,000 invested in a rental property in 1996 would have grown to £14,897 by last year, according to the research. In terms of profit this equates to six times the amount earned by shares and more than 14 times the return from leaving the money in a cash account. Economists looked at someone purchasing a buy-to-let property with a 75% loan-to-value mortgage at the end of 1996 when an average home cost £55,000. The investor would have made an enormous 1,390% return on their money over the next 18 years which saw rents soar and typical property prices reach £189,000.
Buy to let has really taken off since the birth of specialist mortgages in 1996 and there are now estimated to be 2 million private landlords who own nearly one in five homes in Britain.
This may be something for the over 55s to consider following the pension reforms introduced by the Government last week which allow over 55s to withdraw money from their retirement savings.
With the rise in “staycationing”, buy to holiday let may also be a market worth considering for those with money to invest. However, at West Wales Property Finders we advise checking out an area very carefully and at all times of the year before investing your money in a buy to holiday let.
“Places which may be swarming with visitors in the Summer holidays, could become ghost towns in Winter and this will seriously affect your rental income”, says Carol Peett. “We recommend you buy somewhere which has the ability to attract visitors all year round”, she says.
Pembrokeshire attracts walkers, golfers, artists, writers, historians, film buffs and wildlife lovers throughout the year as well as the usual family holiday market, sailors, surfers, etc. during the Summer. This allows the potential to rent a holiday cottage up to 40-45 weeks of the year, or in some cases even more, compared with perhaps just 12-16 weeks in areas which attract purely holiday visitors.
If you are looking to move to Pembrokeshire, Carmarthenshire, Ceredigion or Gower, or purchase a second home or holiday let here, we at West Wales Property Finders would be delighted to help you. Please call Carol or Rayner Peett on 01834 862816, email carol@westwalespropertyfinders.co.uk or check out our website on www.westwalespropertyfinders.co.uk.
