The current state of the BTL market

When evaluating the current BTL market and the additional pressure being placed on people’s outgoings as the cost of living crisis sweeps the UK, there is only one place to start, rent. According to the latest market analysis from HomeLet, the average rent in the UK reached another record high of £1,078 in March, up 0.8% on the previous month. The data showed that when London is excluded, average UK rents stood at £910 – a rise of 0.9% against last month – with all regions across the UK witnessing an uplift in annual variance.

Average rents in the capital are reported to have risen again to an average of £1,770 pcm – an increase of 0.7% on last month’s figures. However, the largest monthly variance was seen in the South West which was up 1.8% to an average of £1,017 pcm. Scotland saw the largest annual variance at 12.9%, pushing the average rent in Scotland up to £770.

From a lender perspective, on the back of rising interest rates, heightened monthly outgoings and as part of a responsible lending approach, many are not only putting up rates but also reviewing and adjusting their affordability calculations. A move which is likely to impact rental calculations and may restrict the amount that some landlords are able to borrow.

However, it’s also prudent to point out that there are still a large number of highly competitive deals on offer, especially for professional landlords who are in a position to take advantage of property-related opportunities as they present themselves. And many opportunities do remain available in a BTL market where demand continues to far outstrip supply.