Buy-To-Let Property Investments in the UK

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So, Why invest in buy-to-let property?

The Booming Buy-to-Let Market in the UK.

Investing in UK buy-to-let property offers advantages, with steady rental income from reliable tenants. Rents increased by 12% nationwide last year. Property prices show consistent growth, providing potential for significant capital appreciation and economic protection.

Buy-to-let properties are considered resilient long-term investments due to the property market’s historical stability, even during economic challenges. Investors can enjoy control and passive income opportunities by expanding their portfolios through buy-to-let properties.

High demand for rentals due to high house prices and obstacles for younger generations to purchase homes makes buy-to-let investments lucrative. It offers steady income, growth potential, and financial stability for investors willing to handle property ownership responsibilities and risks.

A recent report from Uswitch breaks down these interesting statistics on the UK buy-to-let market.

£8.5 billion worth of properties were bought by UK landlords in the first quarter of 2022 alone.

Values of the buy-to-let industry has risen from £21.9 billion in 2013 to £41.3 billion in 2022.

The UK now boasts over 2.74 million landlords. Out of the 2.74 million, over two-thirds (68%) are aged 55 and above.

On average, UK landlords own 8 properties, with each generating around £61,000 in annual rental income.

Discover prime investment opportunities in new build developments for lucrative buy-to-let prospects with Rothmore Property. We are committed to excellence through collaborations with trusted developers, identifying locations with high rental yields, strong demand, and great potential for capital growth.

Our experienced property investment consultants are here to assist you in reaching your investment objectives, offering guidance and insights throughout the process.

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FEATURED NEW DEVELOPMENTS WITH ROTHMORE PROPERTY

Unlock the potential of buy-to-let investments in the UK with Rothmore Property! Explore a varied portfolio of featured properties, offering prime locations and promising returns. Whether you’re looking for a luxurious apartment or a high-yielding investment opportunity, Rothmore has a diverse selection tailored for you in the thriving UK property market.

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Why invest in the buy-to-let market?

The buy-to-let sector in the UK has seen continuous growth due to increasing tenant demand, attracting investors seeking medium to long-term opportunities. While property prices fluctuated monthly, there was an overall year-on-year decline, with forecasts indicating a further 1% drop in 2024. Although this trend may concern current landlords, it offers a chance for new investors to enter the market or expand their portfolios at more affordable prices.

Current market conditions are favorable for buyers, reminiscent of 2018, according to Zoopla. Moreover, Savills predicts a substantial 17.9% property price growth by 2028. Therefore, investing in 2024 during a period of low prices could yield significant capital appreciation for investors.

In 2021, 71% of landlords reported increased demand, nearly tripling from 2019 when only 22% saw growth according to the NRLA.

In the UK, 15.29% of homes are privately rented, with London having the highest percentage at 20.81%.

Savills forecasts a 17.9% growth from 2024-2028, leading to an estimated £45,521 rise in average home value by the forecast end.

In a mature market with no significant price fluctuations, a good return on property investment is typically around 7%.

At Rothmore, our exceptional locations and trusted developer partnerships distinguish us in the buy-to-let market. We carefully select properties in areas with strong investment potential, acknowledging the paramount importance of location in achieving buy-to-let success.

Best Locations in the UK for Buy-to-Let Investments
  • Birmingham: Birmingham presents a strong investment landscape, anticipating further increases in property values. This growth is fueled by factors such as a burgeoning youthful demographic and a flourishing economy.
  • Liverpool: Liverpool offers an average rental yield of up to 7%, making it an attractive option for investors seeking a solid return on investment.
  • Manchester: The city center of Manchester offers an average rental yield of 5%, making it a competitive choice for buy-to-let investments compared to other regions in the UK.
  • Southampton: Southampton has been crowned the top buy-to-let hotspot in England and Wales, boasting an impressive average rental yield of 7.82%. Recommendations suggest focusing on specific property types in city center locations to maximize returns.
  • Leeds: Leeds is renowned for its burgeoning young community, vibrant economy, promising investment potential, and attractive rental yields, establishing itself as a prime choice for buy-to-let investments.
  • Oxford:Boasting a yield of 6.5%, Oxford offers a compelling investment prospect due to its upscale city suburbs and strong demand for rentals.

These locations offer diverse opportunities for investors seeking to capitalise on the UK’s property market through buy-to-let investments.

THE UK'S BUY-TO-LET MARKET

Insight into Buy-to-Let Mortgages in the UK.

Favourable mortgage predictions, such as lower interest rates and competitive fixed-rate options, are enhancing financing opportunities for investors. Understanding mortgage trends and accessibility can influence investment choices in the buy-to-let sector.

Buy-to-let mortgages comprised 14% of total mortgage lending in the UK, signifying a substantial portion directed towards these properties. Lloyds Banking Group commands a notable market share at 15.8% in the buy-to-let mortgage sector, with Nationwide Building Society at 14.3% and Santander UK at 9% following closely.

Forecasts suggest that buy-to-let mortgage advances will increase from £43.5 billion in 2023 to nearly £69 billion by 2032, indicating a promising growth outlook for the buy-to-let market.

Monitoring regional variations, rental growth trends, and affordability aspects will be pivotal in assessing the value and feasibility of buy-to-let investments in the UK. It is crucial to evaluate these market dynamics thoroughly to make well-informed investment decisions.

RENTAL DEMAND IN THE UK

UK Rental Market Trends and Investment Insights.

The average UK tenant allocates about 39.1% of their monthly income to rent, underscoring the substantial financial commitment tenants dedicate to housing expenses. Rental prices have been on the rise, with UK rental prices showing a yearly increase of +5.3% in July 2023, signaling a growing demand for rental properties.

Savills projects a notable growth rate for average UK rents, with an expected surge of 6% in 2024. This forecast paints a positive picture for rental market expansion, which could sway buy-to-let investment choices.

Regional disparities offer varied investment prospects, with regions like the Midlands and Manchester presenting opportunities for heightened rental income, enticing buy-to-let investors seeking profitable ventures. Promising mortgage predictions, encompassing reduced interest rates and competitive fixed-rate schemes, expand financing options for buy-to-let investors.

The 2024 rental forecast anticipates an almost record-breaking price upsurge of 6%, following a pattern of escalating rents since the onset of the pandemic in March 2020. Grasping these mortgage trends is crucial for making well-informed investment decisions in the rental market.

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