Over the last few years, the UK has endured high-interest rates, rising inflation, and skyrocketing mortgages and energy bills. This cost-of-living crisis meant more people looked for rental accommodation as they could not commit to the elevated mortgage prices.
In addition, the housing supply is still down, particularly in the private rented sector. This has forced rental prices up, which benefits buy-to-let investors, mainly if they can purchase a property mortgage-free.
The demand for rental housing is expected to stay strong. Savills’ research predicts that the number of households in the private rented sector will increase by 800,000-1,000,000 by 2031. Currently, there are roughly 4.6 million households in this sector.
This indicates that there will be a continued high demand for accommodation in both build-to-rent and traditional buy-to-let. Purpose-built rental homes will likely become increasingly popular among investors and tenants in the coming years.
If you are a property investor, you may want to keep an eye on the best areas for rental yields if you want to invest in the build-to-rent sector. For instance, the North West buy-to-let returns could reach 9.2% in 2024, indicating strong rental demand and good return potential on property investments in this region.
Explore the UK rental market with our updated investment area guides:
