Europeans boosting UK buy-to-let

The growing number of immigrants arriving in the UK from the newly-accepted EU states is having a major impact on the country's buy-to-let market, it has been claimed.

According to Richard Everitt of estate agents Winkworth, the influx of people from eastern Europe and even Russia is helping to drive the UK's buy-to-let market despite the fact hat the overall housing sector has been in decline over the past 12 months. Speaking to the Independent, Mr Everitt also highlighted that many of the new arrivals are not – as many feared prior to the accession of the new states – unqualified people hoping to live off the UK's welfare state. Instead, he reveals that many are talented and qualified professionals intent on furthering their careers.

As such, the properties that are being let to many of the new arrivals are at the higher end of the buy to let market, providing a much needed boost for property investors in the UK.

One example of the people taking advantage of their country's accession to the EU can be seen from the increase in the number of Poles arriving in the UK. Poland became part of the EU on May 1st 2004 and since then there has been a steady flow of Polish people arriving in the UK to live and work. They have helped to ensure that the buy to let sector has continued to remain buoyant as the housing market continues to slow.

London is a major beneficiary of the increase in the number of people coming to the country to live and work, as many of those coming to the UK head straight to the capital. Areas such as Stratford have seen massive benefits from the influx, explains Mr Everitt, and the recent success of the Olympic bid has also pushed prices in the region much higher. But as rental prices have jumped as the east of the city rides the crest of the Olympic wave, prices have also been pushed up because of the number of people from eastern European countries interested in the area. Demand is now outstripping supply in some cases, meaning buying to let in the area can be a hugely profitable move – if an investor can find a property in the area.

Another factor helping to push up rents is the fact that, as Mr Everitt explains to the Independent, it is very difficult to obtain and verify references, so it is often required by landlords to receive at least six weeks' rent in advance. This means that those coming to work in the country must have a sound financial background to begin with, to be able to afford the deposit, and are therefore more likely to be able to afford higher rental yields.