{"id":6097823,"date":"2023-10-30T08:50:15","date_gmt":"2023-10-30T07:50:15","guid":{"rendered":"https:\/\/www.buyassociationgroup.com\/en-gb\/?p=6097823"},"modified":"2023-10-30T08:50:15","modified_gmt":"2023-10-30T07:50:15","slug":"property-investors-bt","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-us\/news\/property-investors-bt\/","title":{"rendered":"Has the outlook for property investors improved thanks to market shift?"},"content":{"rendered":"

Certain changes within the buy-to-let market have subdued two of the biggest concerns for property investors, and this could provide a boost of confidence in the sector.\u00a0<\/strong><\/p>\n

Over the past couple of years, there have been a couple of particular concerns for buy-to-let landlords<\/a> that have even been cited as reasons for some choosing to leave the sector; these include soaring mortgage rates<\/a>, and ensuring rental properties achieve new proposed minimum energy efficiency standards (MEES).<\/p>\n

However, in a surprising turnaround from Prime Minister Rishi Sunak last month, it was announced that upcoming changes to regulation within the private rented sector would no longer include raising the minimum energy performance certificates<\/a> (EPCs) of rental properties to a C rating.<\/p>\n

The average home in the UK only currently achieves a D rating – and thousands of rental homes fall below this level – so it was a concern for many property investors whose portfolios included older, less efficient housing stock<\/a>. While some were already making plans to retrofit properties, others were planning to sell them.<\/p>\n

Therefore, although the scrapping of multiple energy efficiency measures for the UK is by no means popular among many, for property investors it at least provides some leeway, and could encourage more landlords to remain and reinvest in the buy-to-let sector.<\/p>\n

That being said, energy efficient properties were already much more popular due to rising energy bills<\/a>, so those landlords who keep this aspect as a priority in their rental homes may find their portfolios perform better.<\/p>\n

Buy-to-let mortgage rate improvements<\/h4>\n

The other element that has begun to show a glimmer of hope for property investors is mortgage rates, which have been coming down over recent weeks. The Bank of England also held interest rates at 5.25%<\/a> in its last meeting, which although is still higher than most would ideally like, is seen as a positive step.<\/p>\n

Lenders have been dropping their rates and boosting their product numbers considerably, both before and after the Bank of England’s announcement. According to Moneyfactscompare<\/a>, the average two-year buy-to-let mortgage rate at the start of October had fallen to 6.40% from 6.64% in September.<\/p>\n

There are even some sub-5% rates<\/a> out there now for property investors who fit the bill, while Moneyfacts data also shows that the number of buy-to-let deals on the shelf for October was 2,581 – up from 2,475 in September and just 988 in October 2022.<\/p>\n

Of course, the hope is that as inflation eventually comes down, so will mortgage rates, although the general consensus is that we are highly unlikely to return to the record lows we had seen in recent years before the latest series of hikes.<\/p>\n

Yields up for property investors<\/h4>\n

Rental prices have been climbing<\/a> at record levels over the past couple of years, as the number of tenants seeking homes has increased at a rate that has far surpassed the supply of new rental stock coming to the market. For property investors, this means most rental homes marketed are seeing huge levels of demand.<\/p>\n

Recent research from Fleet Mortgages<\/a> found that rental yields for property investors have increased in every region of the UK over the past 12 months, and most forecasts expect this to continue to climb.<\/p>\n

And while many landlords may be pleased to save potentially large amounts of money by not being legally obliged to improve the energy efficiency ratings of their properties, there has been some research that shows their investments could actually be more profitable if they have a higher EPC.<\/p>\n

One survey earlier this year by Shawbrook Bank found that almost three quarters (72%) of 18-34-year-old renters said that they always check EPC ratings on the homes<\/a> they are looking at before proceeding. Another report by FirstPort found that buyers would be willing to pay \u00a316,130<\/a> more to buy an energy efficient home.<\/p>\n

Therefore, property investors that are particularly keen to futureproof their portfolios might be more likely to invest in newer, more energy efficient properties now in order to attract future tenants and buyers, particularly if the government (or a new government) moves the goalposts again.<\/p>\n","protected":false},"excerpt":{"rendered":"

Certain changes within the buy-to-let market have subdued two of the biggest concerns for property investors, and this could provide a boost of confidence in the sector.\u00a0 Over the past couple of years, there have been a couple of particular concerns for buy-to-let landlords that have even been cited as reasons for some choosing to… Read more »<\/a><\/p>\n","protected":false},"author":1069,"featured_media":5026987,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[2,6],"tags":[412,433,457,108],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts\/6097823"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/users\/1069"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/comments?post=6097823"}],"version-history":[{"count":0,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/posts\/6097823\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/media\/5026987"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/media?parent=6097823"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/categories?post=6097823"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-us\/wp-json\/wp\/v2\/tags?post=6097823"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}