New research has revealed that buy-to-let property rental yields are rising across three quarters of the UK.
Buy-to-let investors now receive average monthly rents of £874, however, the high point in the market, when students crowd the market, is over. The strength in the industry could therefore be a result of many tenants choosing to stay in private rental accommodation.
Buy to Rent Returns Rising Across UK
Those with assets in the buy-to-let sector are probably seeing higher returns than a year ago.
The HomeLet Rental Index revealed that nine of the 12 UK regions saw annual rental price increases in November.
HomeLet revealed that the average landlord earns £874 in gross rent per month from each asset. Properties in Scotland are performing the best in the UK, as rents rose 11.7% over 2014.1
Traditionally, at this time of year, prices seem to drop slightly after the high figures seen in September and October, due to a large amount of student tenants moving into the market. However, HomeLet say that their latest research proves the industry has an underlying strength.
Chief Executive Officer of the Barbon Insurance Group, of which HomeLet belongs, Martin Totty, says: “The outlook for the private rented sector remains positive for several reasons: the pace of house building is unlikely to have a significant effect on the supply of property to buy or to rent in the short term; high house prices; and a mortgage market where lending criteria remains constrained, are combining to ensure that the demand from tenants needing rented accommodation remains strong.”1
Additional research from Knight Frank, and Savills shows that many people are choosing to live in rental accommodation, despite the ability to buy their own home, naming the flexibility of renting as the foremost reason.