The promise of buy-to-let property investment has drawn many expectant parties to the private rented sector in the last several years. Since the year 2000, the private rented sector has doubled in size to account for 4.6 million households in the UK, representing a sprawling collection of real assets for property investors. With the market constantly shifting in light of sweeping social, economic and regulatory changes, however, keeping abreast of the most recent opportunities and pitfalls can be a constant challenge. Maintaining an insight into buy-to-let opportunities and housing market trends requires a level of oversight that even experienced investors can struggle with, especially in 2024.
As specialists in alternative buy-to-let property investment, Concept Capital Group regularly collects data on the housing market to integrate into our corporate strategy and ensure we offer our clients the best possible return on their investment. For an overview of some of the core trends and opportunities present in 2024’s buy-to-let housing market, this blog will give you the insight you need to put your capital where it should be.
For a similar insight into the challenges facing the buy-to-let market in the second half of 2024, read last week’s blog.
The Buy-to-Let Opportunities This Year
Opportunity #1: The Buy-to-Let Market is Still Resilient
Last year saw the buy-to-let market in a state of turmoil. Mortgage rates rose drastically as a result of an interest rate hike, landlords were threatening to exit their properties for greener pastures, and renters both young and old struggled to keep pace with a rising cost of living. Although buy-to-let stakeholders are still experiencing the aftershocks of that year in many ways, the market has proven to be more resilient in 2024 than one might expect.
The move towards stability has been a gradual one for the private rented sector. The pressure exerted on buy-to-let mortgagors by last year’s crisis saw an estimated £300 billion in outstanding mortgage debt at risk of going unpaid – the equivalent of roughly 18% of the overall mortgage market. With the Bank of England freezing interest rates at a 15-year high of 5.25% since August 2023, the first half of this year has been plagued by speculation as to when rates would be lowered.
Despite this trepidation, the market has already started to show its resilience. According to Sky News and Rightmove, house prices have flattened out since last year, with sales activity picking up despite ongoing affordability pressures. A Rightmove press release also shows that the number of sales agreed in April 2024 was 13% higher than in 2023, with a fall in mortgage rate sensitivity prompting an 8% rise in buyer demand. Although the housing market remains more sensitive than in previous years, this resilience is a strong signal that there is a continued scope for property investors and landlords to profit from buy-to-let opportunities in 2024.
Opportunity #2: The General Election Will Change the Private Rented Sector
The upcoming general election could introduce changes many existing landlords are uncertain about. In April this year, the long-debated Renters Reform Bill was voted through parliament with the caveat that its proposed ban on no-fault evictions would be delayed indefinitely. Although the incumbent Conservative government has been noncommittal about addressing the rising rate of no-fault evictions within the private rented sector, the Labour party’s policies for addressing imbalance within the private rented sector could see more concrete action towards the practice.
Still, with Labour’s promise to commit to a target of 1.5 million new homes, landlords and property investors at all levels could benefit from a sudden resurgence in housebuilding replenishing the available stock of affordable buy-to-let homes. A Labour victory could also mean a commitment to economic growth and wealth creation, with the party working closely with developers to build new infrastructure, residential or otherwise.
Regardless of whether the election results in a Labour government, historical data has shown that house prices tend to trend upward in the 12 months following a general election. Even now, many would-be landlords, homeowners and developers are delaying their property transactions until the election takes place, to see the severity of its impact on mortgage rates and house prices. Supporting policy from the winning political party is predicted to have a substantial effect on the private rented sector’s rate of recovery, according to the Royal Institution of Chartered Surveyors (RICS), setting the stage for savvy landlords and investors to invest heavily before the market accelerates throughout 2024 and into 2025.
In any case, the shifting political climate of the UK will present a uniquely time-sensitive opportunity for buy-to-let investors to find success.
Opportunity #3: The Promise of Alternative Buy-to-Let Property
For experienced investors who understand the importance of diversification and hedging against the fluctuations of the mainstream market, alternative investments are a much-valued addition to any portfolio. These asset classes can significantly improve the risk and return profile of an existing portfolio to enhance total returns.
In the private rented sector, alternative buy-to-let property is a growth area. Heavily publicised examples such as real estate investment trusts (REITs) have already proven highly lucrative, and the rise of professionally managed property has given weight to the traditional buy-to-let ideal of passive income.
Alternative buy-to-let opportunities often avoid additional expenses such as landownership fees and Capital Gains Tax, allowing alternative property investors to enjoy much lower entry points to their investment. At Concept Capital Group, for example, we offer modular homes that are classified as real assets while achieving a level of quality and comfort on par with a traditional, newly built buy-to-let home. This classification allows us to onboard international clients with more ease than with traditional property, creating a greater scope for these investors to easily slot them into their existing portfolios and schedules.
The alternative buy-to-let property still lacks the wide availability of a traditional, direct property investment, but several major firms like PwC do offer options for investors who are in the know. The team at Concept Capital Group can also help by working closely with your investment goals to build a bespoke opportunity in alternative buy-to-let property investment.
Buy-to-Let Investing with Concept Capital Group
Although the housing market can still be a cause for concern, property investors can still find secure and stable opportunities to grow their wealth throughout the private rented sector. Buy-to-let property may not seem as stable as it once was, but alternative property investments like the ones we offer at Concept Capital Group offer a recession-resistant solution for preserving your capital and diversifying in uncertain times.
For more information on our alternative buy-to-let investment opportunities, book a call with our team today.
