To maximise yields and return on investment, any property investor looking at buy to let properties should bear in mind the tenant that they are hoping to attract. Many headlines have been devoted to the young people being priced out of the UK property market and the inability to save for mortgage deposits. The help to buy scheme whilst making the possibility of home ownership possible for some it has also been credited with causing the increase in the prices. The recent update in lending criteria for mortgages has seen a major reduction in new applicants looking to buy property in 2014.
So who are the tenants of 2014? What buy to let properties are the best option for the property investor in 2014?
The demographics of today’s tenant has changed, should therefore our choice of buy to let properties reflect this? The biggest shift is that private renters now outnumber social tenants. Recent reports advise that the number of private rented households over the last 13 years has almost doubled rising from 1.9 million to 3.6 million. The rise in the value of the house prices has lead to a rise in the amount that is required for a mortgage deposit and this has translated into the average age of a first time buyer to be around the mid-thirties.
Homelet one of the UK largest rental referencing and insurance companies advise “the largest rental population is 26-35 year olds, 58% of whom rent. However, 53% of 36-45 year olds also find themselves in this position. In fact, the only demographic with a rental population of below 41% is 18-21 year olds, largely because many still live with their parents and are not yet independent.”
To appeal to these target audiences, those considering purchasing buy to let properties should look at accommodation within easy access of public transport as many of these tenants have no or limited access to their own vehicles. Bathrooms should be modern and include a power shower as this is on the list of many modern day tenant. The interior of these buy to let properties should be light and contemporary especially the kitchen as this like the bathroom can be a deal breaker when a tenant chooses a property. Some potential buy to let properties require updating or refurbishing and whilst any property should be as attractive as possible, the level of expenditure should reflect the type of accommodation. It also should reflect that the property is to be tenanted and may not be cared for as perhaps a home owner would, as well as the target tenant. This may also influence the choice and standard of materials used in any updating or refurbishment.
Investment Property Consults have considerable expertise in assisting client with the selection and refurbishment of buy to let properties to maximise rent and occupancy and are happy to assist property investors contemplating buy to let properties