The Daily Telegraph: Join the Let Set
Sat 05 Jan 2013
Rental demand in many parts of the UK has never been higher.
New Years is about new challenges: gym memberships, diets and vows to stop smoking. The property market is full of challenges too; prices around the country are set to remain flat or worse, with tentative improvements in the economy yet to filter down to homeowners.
This is why thousands of people have resolved to dive into the only housing sector that is truly booming: buy-to-let (BTL).
The rental industry's figures show why BTL is set to be 2013's favourite career change. Average UK rents have risen by 13.6 per cent since 2009, according to Rightmove, while capital values in most places have stagnated or fallen. The property website predicts another two per cent rise across the country this year.
And the proportions of UK households renting has increased in the past decade from 31 per cent to 36 per cent, according to the latest Census figures. This means that in parts of big cities there is a huge demand for rental properties. In Westminster, for example, 4 out of every 10 homes are privately rented, not owned.
Little wonder that Britons from all walks of life have recognised this sector as a sound investment even in troubled times.
Property queen Sarah Beeny handles a portfolio of rental properties. Former Blue Peter presenter Konnie Huq owns London buy-to-lets, and one time Bond girl Fiona Fulerton has rental homes in the Cotswolds. Former tennis star Tim Henman has investments in south-west London and has bought into a property club that owns and rents luxury villas across Europe.
But how can you follow in their footsteps? Three of Britain's best-known property experts (each a buy-to-let landlord in their own right) have chosen different types of homes to earn you healthy returns. Whether you are after a country cottage, a city slicker pied terre or a villa in the sun, there are opportunities for all.
Phil Spencer's London approach
The Location, Location, Location star and host of Channel 4's The Common Denominator has two rules: buy somewhere you know and target the type of tenant you want. "If you understand the housing market where you live, you are likely to make a more informed decision than if you were trying to buy 150 miles away", says Phil.
"Then decide what type of person you want to rent your property. Students, young professionals, couples or families? What do they look for? How much will they pay? How will they travel to work?"
His own buy-to-let portfolio targets young professional renters in the capital. "Several hundred thousand graduates arrive in London each year for their first jobs. They have lived with friends during university and usually wish to continue doing so," he adds.
"This is why I have bought three-bedroom Victorian houses. I convert one room to get a fourth bedroom and let to four sharers."
London is the UK's hottest lettings market with more than 45 per cent of all households renting. LSL Property Services, which owns Your Move, Marsh & Parsons and other rental chains, says average London rents rose 0.9 per cent in October, to a monthly level of 1,102 for a two-bedroom home.
Agents confirm that landlords typically receive seven per cent rental yield per year. This is far more than you can earn through most banks or building societies. Savills meanwhile, forecasts London rents will rise by 26.4 per cent in the next five years, more than anywhere else in the UK.