build to rent market grows, average rental prices increase

A series of statistics regarding rental prices in London have been released, and they’ll whet the appetite of build-to-rent investors.

According to the Rightmove Q3 report, the average rental asking price in the capital has risen 5.6% since Q3 ’18. The report also showed the quarter gave the highest growth in rent requested per month since Rightmove stated recording data, a figure standing at £2,104. That towers well above the UK average of £828.

If that disparity seemed vast, it was further underpinned by data from Zoopla. Their chart below shows that over 45% of a single person earnings in London goes on rent. A figure nearly 20% above the UK average.

Source: Zoopla

With rental prices in London going up in such a way, it’s no surprise that the build-to-rent segment is also thriving. Recent figures show that the BTR sector in London has grown by a staggering 35% in the last 5 years alone. With a focus on properties at the higher end of the scale, the report also showed that 55% of properties priced at £2500 per week are owned by professional investors or BTL developers.

With rental prices increasing in London, property investors are using alternative funding options such as bridging loans to maximise their income. According to the recently published Bridging Trends report, the first and third largest usage of bridging loans for Q3 ’19 was for investment purchases and heavy refurbishments. These statistics highlight that the fast and flexible nature of bridging loans is ideal for investors looking to benefit from London’s property rental market.

Property conversions via heavy refurbs are a method that investors can maximise the rental income they receive from their properties. Converting a single property into an HMO can turn one income source into multiple revenues. Bridging loans are seen as a popular way of funding such works due to their fast and flexible nature.

Upon an initial enquiry, terms for a bridging loan can be agreed within minutes and funding in place in a matter of days. Ranging between £50k and £10m, the typical length of a loan is twelve months.

Whether needed for heavy refurb, build-to-rent or buy-to-let, bridging loans can provide investors with speedy funding to capitalise on property purchase and conversion opportunities as they appear.

To get further details on bridging loans or to make an application, call us now on 0203 051 2331 or use this contact form to get a call back from our dedicated team.

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