The UK now has a record number of buy-to-let investors, with 2.5 million landlords in the latest tax year. Research by London estate agent, Ludlow Thompson, has revealed the record high, which is up 5% from the previous tax year. Over the past five years, the number of landlords has risen by 27% – there were 1.97 million landlords in 2011/12. Also, the number of properties that each landlord owns has risen for the fifth consecutive year. Now each landlord owns 1.8 properties, on average.

The increase in the size of the portfolio and the number of landlords shows that investors are continuing to have confidence in the buy-to-let sector. This is despite tax changes, stamp duty being introduced on second homes, increased regulations and unpopular licensing schemes. With about five million UK households, or 20%, living in rental accommodation – a figure which is expected to keep on rising – there are good reasons to keep the faith in the rental sector. As well as earning an income from rentals, property prices are also rising faster than inflation, which is another good reason to invest in bricks and mortar.

The estate agent says investors and landlords are continuing to see property, particularly in London, as a good investment. It points out that long-term landlords with the company have experienced 9.9% average annual returns each year since 2000. The fact that demand is continuing to outstrip supply is one strong factor that makes the rental market an attractive investment. With government statistics forecasting that London’s population will increase to about 10 million people by 2035, that is another good reason to invest in residential property.

The estate agent also points out that a solid private rental sector allows greater mobility for the workforce, which is essential for economic growth. Chairman of Ludlow Thompson, Stephen Ludlow, said the the buy-to-let market looks strong from a long-term point of view. He said his figures show that the number of rental applications for London has increased already this year, with the capital’s job prospects, social scene and improving transport links being contributing factors.

Bank of England data also shows that 12.7% of all mortgages granted in the final quarter of 2017 were for buy-to-let investments. This is down from 14.4% in the same quarter in 2016, but it still shows how resilient the sector is, despite tax changes, the reduction of mortgage interest relief and the stamp duty levy on second homes.

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