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12th January 2012

Location to be key to successful buy-to-let investment in 2012

High rents are likely to continue to drive UK property investment in 2012, it has been claimed, but good returns will largely depend upon location.

 

That is according to property services company Assetz, which has predicted that rental income from buy-to-let property will continue to rise this year, though growth in capital values will remain subdued.

 

As such, it is even more important than ever that investors in buy-to-let properties are selective about where they make purchases.

 

It advises choosing an attractive location with a sound employment market, which is not too reliant on manufacturing or the public sector.

 

Such areas could see five per cent or greater growth in rents this year, while areas which are struggling with high levels of unemployment will see very low transaction levels and a fall in value of as much as ten per cent.

 

Landlords should also get to know the local rental market, investigating how well similar properties have let over the previous twelve months in that location and speaking with local agents and find out what rental incomes are being achieved and which properties are most popular in that area.

 

Overall though, 2012 is shaping up to be another good year for landlords.

 

"I expect rents to continue growing strongly, in the region of five per cent next year, as the banking sector failure, consequential restricted mortgage lending and poor employment prospects has left a whole generation of potential first time buyers with little prospect of buying a home," said Stuart Law, chief executive of Assetz.

 

"Consequently, landlords are set to benefit from another year of strong yields, albeit alongside only modest capital growth for the time being."

 

It follows a recent report from the Royal Institution of Chartered Surveyors, which also predicted that the buy-to-let sector will perform well in 2012.



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