Now, in many areas rents are almost back at their 2007 peak. In April, the average rent in the UK rose by 0.6% to £663 per month – 2.2% higher than a year ago.
In London, where house prices have risen by 13% in the past year according to the Land Registry, prospects are particularly promising, with an average annual return of 18.8%, or £39,090. This compares with 5.1%, or £6,875, in the North-East.
Importantly, lenders are looking favourably on the sector once more.
In the recession buy-to-let mortgages suffered more than most as lenders tightened their criteria significantly, demanding 35% deposits instead of the usual 15%.
Many landlords who wished to take advantage of lower property prices had their hands tied and, according to the Council of Mortgage Lenders, only 93,500 buy-to-let mortgages were arranged in 2009 – a quarter of the number seen in 2007.
So despite the possible increase in CGT the buy-to-let market is looking hot to trot again and the longer term future looks bright.
As more lenders get back into the market with attractive deals investors old and new are likely to be tempted to jump in.
Of course, this spells good news for mortgage brokers as the sector bursts into life again and demand increases.
Let’s just hope the potential CGT increase doesn’t put a spanner in the works of buy-to-let at this sensitive time, and that the coalition government doesn’t have any more unpleasant surprises in store.