The Motley Fool

Buy-to-let’s worth more than 90% of the FTSE 100! But should you buy these dividend stocks instead?

The buy-to-let market in the UK is huge and getting more so. And the numbers from rental app Bunk are there to prove it.

According to the online lettings platform, there are 5.2m tenants across England, Scotland, Wales and Northern Ireland currently renting in the private sector. By multiplying the number of renters in each of these regions with the average rental cost, Bunk calculated that the total UK private rental sector is worth a staggering £51.9bn.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

To put this in perspective, that’s more than the gross domestic product of 130 nations. It’s also bigger than the market capitalisation of 90% of the FTSE 100, bigger than some of Britain’s stock market bruisers such as Lloyds (£35.5bn), Vodafone (£39.1bn) and Barclays (£25.5bn).


Market Cap (£bn)

Royal Dutch Shell
















Rio Tinto


British American Tobacco


UK Private Rental Sector


Reckitt Benckiser














National Grid


Anglo American




Don’t be hasty

Impressive data, huh? Well co-founder of Bunk, Tom Woollard, certainly thinks so and is quick to laud “the attractive proposition the buy-to-let sector still presents for landlords despite a number of changes that have dented the profitability of these investments.”

And he believes that buy-to-let still has plenty to offer potential investors. He comments that “with rents increasing and an acute shortage of properties being built for sale and to rent, we will surely see this upward trend climb further in the future.

It’s certainly true that rents are on the march in the UK, but for beleaguered landlords, this doesn’t tell the whole story, as a recent report on buy-to-let confidence shows.

Sure, revenues might be increasing, but so are investor liabilities — take recent hikes in stamp duty, increased regulatory costs related to House of Multiple Occupation (HMO) changes, or unexpected fees brought on by the recent Tenant Fees Act, to name just a few. And the punishing landscape looks set to get ever tougher as Britain’s worsening housing crisis exacerbates government efforts to free up homes by pushing out landlords.

Dirt-cheap dividends!

If it’s a choice between buy-to-let or investing in the FTSE 100, there really is no competition, in my opinion. Indeed, the share price washout of recent days provides a brand new opportunity for investors to nip in and grab a bargain.

Taylor Wimpey and Barratt Developments are a couple of blue-chips I myself own, and fresh falls here leave them dealing on forward P/E ratios of below 9 times. The good news doesn’t end here, either. At current prices, they sport monster prospective dividend yields of 7.3% and 12.3%.

If you’re worried about Brexit, though, and are after some emerging market exposure instead, how about buying up banking Goliath HSBC — with its low earnings multiple of 10 times for 2019 and 7.1% prospective dividend yield — or insurer Prudential and its corresponding readings of 8.5 times and 3.8%?

And for those worried about trans-Pacific trade wars and slowing global economies, there are always classic defensive shares like United Utilities to pick from (an earnings ratio of 13.7 times and a 5.4% dividend yield can be found here). So forget buy-to-let and go shopping on the Footsie, I say.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Royston Wild owns shares of Barratt Developments and Taylor Wimpey. The Motley Fool UK has recommended Barclays, HSBC Holdings, and Prudential. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.