The question of whether to become a landlord in today's property market is more relevant than ever. With fluctuating mortgage rates and the property market constantly evolving, many potential investors might hesitate. This guide will delve into the benefits of becoming a landlord and the long-term benefits of property investment.

The Case for Investing in Property Now

1. Rising Rents Offer Long-term Returns

One of the most persuasive arguments for becoming a landlord is the continuous increase in rental prices. Over the past five years, we've observed a consistent upward trajectory in rents across Leicester’s. This trend is not merely a reflection of current market conditions but a long-term shift driven by the growing demand for rental properties. For instance, data from the last 5 years shows that rental prices in some areas have surged by as much as 20-30% to an average of £1,139 per calendar month.

Although there are indeed costs associated with owning a rental property, including your mortgage, maintenance & repairs, insurance to name a few, in the long-term with your property appreciation, your overall Return On Investment (ROI) is a stable one when we look at how the property market has shaped over the last 10 years.

2. Property Values Continue to Appreciate

Despite the ebbs and flows of the market, property values have consistently appreciated over the last five years. Statistics indicate an average increase in property prices by approximately 15-25% across various locations in Leicester and Leicestershire. This appreciation is not just a short-term phenomenon but part of a longer-term trend that underscores the resilience of investing in property as an investment class. By focusing on the long haul, investors can benefit from both rental yields and capital growth, making property investment a dual-stream income source.

The average property price in Leicester is currently at £309,045. In the current market, asking prices can be negotiated with sellers, giving you an increase on your overall ROI.

3. Market Stability and Future Prospects

With the Bank of England Base Rate looking to stabilise for the time being and with market expectations that it may get lowered over the next year or two, there's an added layer of predictability in the market. While mortgage rates have been on the higher side, the stabilisation of interest rates suggests a more predictable investment environment moving forward. This stability is crucial for planning long-term investments, as it allows landlords to forecast their financials with greater accuracy and even looking at choosing how long to lock your mortgage rate for (please speak with a professional mortgage advisor for this). Moreover, as the market adjusts to these conditions, the potential for property investment to offer substantial returns remains high.

Embracing Long-term Investment Perspectives

Investing in property should always be viewed through a long-term lens. The real estate market is known for its cycles of ups and downs, but the overarching trend has been one of growth. By focusing on the potential for rental income and property appreciation, investors can navigate the current market's challenges and capitalise on its opportunities.

How Seths Can Assist

For those ready to take the jump into property investment, Seths is here to guide you through every step. Managing property investments, from single properties to extensive portfolios, requires expertise and dedication. Seths offers a comprehensive property management solution that covers meeting regulatory requirements, finding the right tenant, handling repairs and maintenance, and ensuring timely rent collection. By partnering with Seths, you can enjoy a hassle-free investment experience, allowing you to focus on the long-term growth of your property portfolio.

Conclusion

Becoming a landlord in the current property market is a decision that should not be taken lightly. However, with rents on the rise and property values appreciating, the potential for a substantial return on investment is significant. By adopting a long-term perspective and leveraging professional property management services like Seths, investors can navigate the complexities of the market and achieve their financial goals. Now may indeed be the right time to invest in property, and Seths is ready to help you make the most of this opportunity.

Notes:

The above is an informative blog and not advise whether you should invest in the property market. Please speak with a mortgage broker who will be able to give you affordability information, alongside what is the right mortgage product for you.

Please speak with your financial advisor whether investing in property is the right option for your investment risk.

Seths are here to guide and advise on how to take the next step in becoming a landlord and will guide you through every step of the way.