Property investors in the North East are optimistic about the future and plan on making further investments in the near future according to the results of a recent survey.
The survey carried out by KIS Lettings revealed that a third (33.1 percent) of landlords plan on making further property purchases in the next 12 months.
Ajay Jagota, managing director of KIS Lettings, said that the response reflected the current flourishing conditions and surge in demand in the private rented sector.
He said: “There’s a national upward trend and demand for private rented accommodation. This, coupled with low property prices and high rental yields, is making further investment a very attractive prospect for those with funding to buy.
“The private rented sector is possibly in the strongest position it has ever been in. More people are turning to renting as mortgages and home ownership become ever more unobtainable, therefore, creating a surge in demand for private rented accommodation.”
In their recent ‘Rental Britain’ report Rightmove and Savills, predicted that one in five households could be in private rented accommodation by 2016. It also revealed that in the ten years from 2002 to 2012 the number of people privately renting homes has nearly doubled from 2.5 million to 4.8 million.
The report forecasts that a £200bn investment will be needed, but says that only £50bn of this is expected to come from buy-to let-funding.
KIS Lettings manages property for more than 400 landlords across the North East. The South Shields-based lettings agency, which also has branches in Sunderland and North Tyneside, asked all landlords to complete the survey.
The results indicated that the majority of landlords (67.2 percent) entered the sector after seeing an investment opportunity, as opposed to inheriting property or renting to relocate.
Ajay added: “The North East is an attractive location for property investors looking to enter or expand in the private rented sector.
“Rental yields in the region are among the highest in the UK (6.5 percent), beaten only by the North West (6.6%), and property prices are traditionally among the lowest.”