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Investors Shift Focus in The BTL Economy

Better affordability and higher rental yields will continue to push property investors further north, according to the July 2018 report by The Mortgage Lender, called The Buy to Let Economy. A summary of the report, written by Martin Ellis, is below.

UK economy
Economic growth – measured by gross domestic product (GDP) – weakened further in the first quarter of 2018, rising by just 0.1% compared with the previous quarter. The slowdown in GDP growth that has taken place since mid-2016 has been led by a weakening in household spending growth. This has been primarily a result of sterling’s fall in value following the EU referendum when the pound declined sharply. However, the unemployment rate, currently at 4.2%, is at its lowest since 1975, and more than three-quarters of working age adults are in employment, the highest rate on record.

The UK housing market
Regionally, Scotland has experienced the biggest increase in house prices over the past year, up by 6.7% in the year to March 2018. The East of England (5.8%) and the East Midlands (5.6%) have seen the next largest rises. There has been a small fall in house prices in London over the past year (-0.7%), with low annual growth in the North East (2.1%) and the South East (3.3%).

The cities showing the largest annual growth in the year to April 2018 are all outside southern England, led by Manchester (7.7%) and Leicester (7.4%). Not surprisingly, given the overall strength of house price inflation in Scotland over the past year, Edinburgh (7.2%) features in the top five performing UK cities.

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