New data shows that total returns for buy-to-let property in England and Wales increased substantially in the year to March.
According to figures in the Property Partner residential market index, overall returns on buy-to-let increased to 9.57% during the twelve months.
Ups and downs
The Index combines both rental income and capital growth to gauge the total rate of return on residential property over a period of time. Results are generated by research carried out by Property Partner and Office for National Statistics data.
Quarterly, buy-to-let portfolios were up by 2.31%, despite falling by 0.31% month-on-month.
The year-on-year rises recorded were lead by London, where buy-to-let returns increased by 16.49%. The capital was followed by the East of England, where a rise of 13.18% was recorded. Next came the South East (12.1%) and the East Midlands (8.59%).
In the North West, there was a rise of 8.44% and 8.42% in the South West. The West Midlands saw an increase of 6.08%, Yorkshire and the Humber 4.51% and the North East 2.57%.
Stamp Duty Rises
Rob Weaver, Property Partner’s director in investment, feels the strong yearly growth was driven by investors rushing to beat the Stamp Duty surcharge increase deadline.
Weaver notes, ‘this was especially true of London, where annual returns were in double digits, reaching an eye-watering 16.5%. The East was strong too and from first hand experience the Northern Powerhouse regeneration plan is boosting investment activity in the North West and in particular Manchester.’
‘What’s clear is that regional disparities in the housing market are widening, with Yorkshire and Humberside and the North East regions looking fragile,’ he continued.
Mr Weaver also pointed out that would-be investors are exercising caution ahead of the EU referendum in June. He went on to say however that, ‘the fundamentals of high employment, wage growth, cheap borrowing and the chronic shortage of supply remain in place and are positive.’