# A Brief Look at the Buy-to-Let Market as it Stands Today
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-12-06
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Buy-to-Let Investment: Why Now Could be the Time to Invest
Meta Description: Discover why the buy-to-let sector is thriving post-pandemic, with demand outstripping supply. Explore opportunities for expanding your property portfolio.
URL: https://financedigest.com/a-brief-look-at-the-buy-to-let-market-as-it-stands-todayhtml

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The past 18 months have been memorable for the wrong reasons; 2020 in particular will go down in history as one of the darkest years the world has endured since the Second World War.

With the closing quarter of 2021 now well underway, there are at least initial signs of normality creeping into the picture once again. Nobody really knows how the next few months will play out, but there is growing optimism of much smoother and more prosperous years to come.

This is particularly true where the buy-to-let sector is concerned, which has seen explosive [performance throughout the course of the year](https://www.financedigest.com/equity-markets-show-strong-end-of-year-performance-in-camradatas-q4-2017-investment-research-reports.html "Equity Markets Show Strong End of Year Performance in CAMRADATA’s Q4 2017 Investment Research Reports"). At the height of the pandemic, many [thousands of landlords were struggling with the prospect of tenants who could not afford to pay](https://www.financedigest.com/thousands-of-british-postal-workers-walk-out-over-pay.html "Thousands of British postal workers walk out over pay") their rent.

Legislation was introduced by the [government to prohibit evictions taking place on the basis of Covid-related financial](https://www.financedigest.com/brexit-and-financial-services-a-government-oversight.html "Brexit and Financial Services – A Government Oversight?") difficulties. Consequently, landlords across the country found themselves with major income issues, while still being [expected to cover their own costs](https://www.financedigest.com/five-cost-of-living-trends-expected-in-2023.html "Five cost of living trends expected in 2023") and outgoings.

Thankfully, the turbulence has now largely subsided, and the sector is performing with remarkable strength. If anything, the effects of the pandemic have [played directly into the hands of savvy buy-to-let investors](https://www.ukpropertyfinance.co.uk/mortgages/types/buy-to-let/).

This goes some way to explain why so many are planning to [expand and/or diversify their portfolios](https://www.financedigest.com/heineken-to-invest-300-million-in-brazil-to-expand-premium-beer-portfolio.html "Heineken to invest 0 million in Brazil to expand premium beer portfolio") over the course of the next 12 months.

**Why Now Could be the** [Time to Invest](https://www.financedigest.com/funeral-plan-investments-four-times-better-value-than-a-cash-isa.html "Funeral plan investments FOUR TIMES better value than a cash ISA")

For new and established [investors alike](https://www.financedigest.com/digbeth-is-simply-divine-to-young-urbanites-and-investors-alike.html "Digbeth is simply Divine to young urbanites and investors alike"), the sensible option throughout the pandemic was to ride things out and see what happened. Now there’s a degree of clarity with regard to the state of the [private renting sector](https://www.financedigest.com/dollar-slides-on-contraction-in-private-sector-activity.html "Dollar slides on contraction in private sector activity"), the time has come for important decision-making.

Numerous contributory factors have [propelled average UK house](https://www.financedigest.com/why-student-housing-has-been-propelled-into-the-mainstream.html "Why Student Housing has Been Propelled into the Mainstream") prices to historic highs across almost all regions of the country. Despite the widespread economic uncertainty gripping the nation for much of the past two years, [house prices](https://www.financedigest.com/uk-house-prices-stabilise-after-four-month-fall-halifax-says.html "UK house prices stabilise after four-month fall, Halifax says") have skyrocketed like never before.

Demand for quality homes in desirable areas coupled with record-low mortgage rates paved the way for an explosive year for the [real estate](https://www.financedigest.com/from-static-office-to-dynamic-brand-hq-five-steps-to-reviewing-your-real-estate.html "From static office to dynamic brand HQ: Five steps to reviewing your real estate") sector. All the while, prospective [first-time buyers](https://www.financedigest.com/answering-the-nations-first-time-buyers-questions.html "Answering the Nation’s First-time Buyers Questions") found themselves increasingly priced out of the equation.

Sky-high property prices and difficulties qualifying for [home loans](https://www.financedigest.com/home-equity-made-simple-things-to-know-before-applying-for-loans.html "Home Equity Made Simple – Things to Know Before Applying for Loans") continue to prove problematic for ‘generation rent’. With no choice _but_ to rent privately, millions who would love the [opportunity to own their own homes are turning to the private](https://www.financedigest.com/the-vc-opportunity-breaking-down-barriers-for-private-investors.html "The VC opportunity: breaking down barriers for private investors ") renting sector.

Consequently, [demand for quality rental homes](https://www.financedigest.com/uk-home-asking-prices-rise-tax-cuts-to-spur-demand-rightmove.html "UK home asking prices rise, tax cuts to spur demand: Rightmove") continues to outstrip supply by a considerable margin. A disparity that is [driving average rents higher](https://www.financedigest.com/maserati-aims-at-driving-margins-higher-before-any-spin-off-talk.html "Maserati aims at driving margins higher before any spin-off talk") in most parts of the country, and proving highly profitable for BTL property owners.

**Ambitious Plans for the** [Year Ahead](https://www.financedigest.com/three-waves-of-fintech-disruption-leading-trends-for-the-year-ahead.html "Three waves of Fintech disruption: Leading trends for the year ahead")

According to a recent study conducted by Shawbrook Bank, more than a third of all landlords in the UK are planning buy-to-let [property investments](https://www.financedigest.com/brexit-no-obstacle-as-chinese-overseas-property-investment-doubles.html "Brexit no obstacle as Chinese overseas property investment doubles") within the next 12 months. In addition, one in 10 said that in response to the [shifting priorities of tenants during the pandemic](https://www.financedigest.com/how-has-the-pandemic-shifted-the-perception-of-the-local-bank-branch.html "How has the pandemic shifted the perception of the local bank branch?"), they intend to expand their portfolios into new areas of the country.

In particular, [investors are setting their sights](https://www.financedigest.com/uks-most-liveable-city-manchester-sets-its-sights-on-the-world-from-tourists-to-property-investors.html "UK’s most liveable city, Manchester sets its sights on the world, from tourists to property investors") on rural places outside the usual urban centres. [Flexible working](https://www.financedigest.com/managing-flexible-working-on-a-global-scale.html "Managing flexible working on a global scale") has become the norm for millions of households, making proximity to the workplace irrelevant for renters and buyers alike.

On the whole, average monthly rent prices across the UK have grown by a fairly modest 1.6% since the same [time last year](https://www.financedigest.com/30-years-of-excel-lence-time-to-move-on.html "30 YEARS OF EXCEL-LENCE: TIME TO MOVE ON?"). Regionally, some areas have performed exponentially better than others.

In Wales, for example, average rents are up a massive 13% year-on-year. The South [West](https://www.financedigest.com/first-time-buyer-bags-a-dream-home-in-south-west-london.html "First time buyer bags a dream home in south west London") and South East of England have also seen average growth of 7.6% and 6.1% respectively.

Not only is available inventory already in short supply, but issues regarding lack of building materials and general supplies are [slowing the construction of new homes](https://www.financedigest.com/at-the-home-of-zara-fast-and-slow-fashion-collide.html "At the home of Zara, fast and slow fashion collide"). Quality rental [properties have become](https://www.financedigest.com/property-letting-could-become-a-legal-minefield.html "PROPERTY LETTING COULD BECOME A LEGAL MINEFIELD") a rarer commodity than ever before, which analysts believe will fuel further rent price increases in 2022.

**Mortgage Availability and Affordability**

Funding [property purchases](https://www.financedigest.com/questions-to-ask-yourself-before-purchasing-an-investment-property.html "Questions To Ask Yourself Before Purchasing An Investment Property") and renovations has become simpler for landlords over the course of the last few months. At the height of the pandemic many lenders withdrew or suspended most of their BTL mortgage products.  Elsewhere, those that remained available were prohibitively expensive.

This is something that has been gradually reversed over the course of the year, resulting in a raft of new and competitive deals being introduced for landlords; some of which are being advertised with [interest rates close](https://www.financedigest.com/ecbs-centeno-says-interest-rate-close-to-peaking-if-no-new-shocks.html "ECB’s Centeno says interest rate close to peaking if no new shocks") to record-lows.

The [widespread availability of specialist products like bridging loans](https://www.ukbridgingloans.uk/fast-bridging-loans/) is also motivating landlords across the country to make their moves. Particularly for those who already have assets to borrow against, now really could be the [time to take full advantage of the BTL sector’s](https://www.financedigest.com/time-merchant-acquirers-extra-mile-customers-first-sector-must-learn-mistakes.html "It is time merchant acquirers to the extra mile for their customers. But first the sector must learn from its mistakes. ") unprecedented performance.

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