Rental income not the only advantage of being a landlord

by Daniel Jones

Landlords may be wise to expand their property portfolios in 2014 for more than one reason.

While those renting out homes will already be aware of the healthy returns that can be made through rents paid by tenants, there is also the possibility to view a property purchase as an investment.

This is because house prices in the UK are rising rapidly, with the latest figures from Halifax showing that there was a 7.5 per cent increase in the value of homes in the country last year.

It found prices in the three months to December rose by 1.9 per cent, completing the 7.5 per cent annual hike.

Martin Ellis, a housing economist at Halifax, said that there has been growth of between 1.8 and 2.1 per cent in each of the last six months, so December's rise should come as no surprise.

"Mounting signs that the economic recovery is becoming firmly established, together with a predicted decline in unemployment, should further boost consumer confidence over the coming months. This will increase the likelihood that more people will consider buying a property in 2014, therefore supporting housing demand," he explained.

Investing in a property now, renting it out to collect a regular and substantial income, while watching its price rocket in the coming years could be considered an extremely attractive opportunity by many portfolio holders.

It's also worth remembering that those currently acting as landlords could be enjoying a rise in the value of their existing homes as they continue to operate.

The rise in demand for rental accommodation in recent years has made the sector an extremely lucrative one for investors.

Mr Ellis added that there has been an improvement in confidence when it comes to selling property in recent months, so for now this is likely to curb any huge boom in house prices.

This is not to say rises similar to those recorded in 2013 could not occur again in 2014.

Published on: January 10, 2014

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