The UK’s buy-to-let property investors enjoyed a very strong year last year in terms of average occupancy rates with an average of 2.6 weeks without a tenant over the year reached in the fourth quarter. The quarterly survey, conducted by buy-to-let mortgage specialists Paragon Mortgages for the past 13 years, indicated continued strength in the rental market last year. UK buy-to-let tenancy has always been strong, with an average of 2.6 to 3 weeks of vacancy per 12 months recorded since Paragon began its survey in 2002. Even during the economic crises vacancy levels peaked at 3.5 weeks per year on average. Nonetheless, a result close to the record low of 2.5 weeks of average vacancy set in 2002 will be well received news by property investors across the length and breadth of the UK.
The record low of 2.5 weeks has remained intact since Q4 of 2002 but there is hope that level may be breached at some point during 2015. Reported by specialist property news portal, Property Wire, Paragon Managing Director John Heron commented:
‘It is encouraging to see that in the fourth quarter of 2014 void periods reduced to the lowest point recorded since 2012, only slightly above the lowest average void period reported by our research at 2.5 weeks.
The low average void periods we have seen over the past year, and in previous years, reflects the strong and growing demand we have seen for private rented property together with effective property management by landlords and letting agents in renting out properties.
This is positive news for landlords and, as tenant demand continues to rise, it is possible that void periods may decrease even further in 2015.’
The mortgage lender also reported 58% growth in lending on buy-to-let mortgages over Q4 of 2014 handing out loans valuing £212 million, compared to £140 million for the same period during 2013. How much of that is due to general market conditions compared to the company’s own available resources however is debatable. Across the board, buy-to-let mortgage lending grew by 9% in 2014 compared to 2013, according to data from the Council of Mortgage Lenders. This is in contrast to a 7% fall in the value of loans issued to mainstream home buyers.
Overall, however, the picture is one of increased opportunities for buy-to-let investors but a less than easy environment for traditional buyers. If you are a residential property investor that is good news. Not so much if you are a first-time buyer looking to get onto the property ladder.