If you take a look at the worldwide real estate market there are many opportunities for long-term investments but few offer the same potential attractions as the buy to let arena. If we take the UK for example, the buy to let sector has received mixed coverage in the wider press and indeed many property investors did suffer during the last world-wide economic downturn. However, if you clear away the short-term clutter and concerns about the worldwide economy, there are many positive factors associated with the buy to let sector.
The overall property market
There has been a significant shift in the UK property market trend over recent years with more people now choosing to rent on a short-term basis. While property price rises have effectively priced some people out of the purchase market even if we strip this aside there has still been a significant increase in the number of people renting their homes. This is likely to continue for some time to come and indeed the more people who rent, the more buy to let investors attracted to the market which then squeezes property purchase prices higher and higher.
If we look back at the employment market say 20 or 30 years ago many people would purchase a property when moving to new employment with the idea of staying with a particular company for many years to come. There has been a significant change in the employment market, not only in the UK but also worldwide, with more and more people now mobile. This effectively means that the chances of moving employment today are far greater than they were 20 or 30 years ago.
In many cases it is the ability to be “employment mobile” which can attract new employers and often allow employees to negotiate top price for their services. If you put yourself in the situation of an employer with multiple offices around the UK, and perhaps around the world, can you imagine how valuable a mobile employee would be?
On one hand we have many people choosing to remain with their parents until their late 20s or their early 30s although unfortunately on the other we have families now splitting up, leading to additional demand for property. Even before the latest economic downturn there were already financial pressures on household incomes therefore those moving out of the family home are more likely to rent than purchase outright. Again, this has led to increased demand for rental properties which in itself has attracted more and more investors to the buy to let sector.
It is interesting to look at the changing social and employment trends across the UK, and indeed across the world, and the impact which they are having on local property markets – in particular the rental arena. More and more people are now looking to avoid a long-term commitment to property in the event that they may move employment or indeed it may well be down to the affordability factor.
All of these changing trends play into the hands of the buy to let market and it is no surprise to learn that many investors have their eye on buy to let opportunities for the medium to longer term.