Posts with tag: rental yields

Research finds Nottingham as City with Best Buy-to-Let Yield

Published On: December 5, 2018 at 9:06 am


Categories: Landlord News

Tags: ,

It’s no surprise that, with such large populations of students, university cities offer some of the highest buy-to-let yields.

New research by TotallyMoney reveals university cities are “potentially the most lucrative hotspots for landlords.”

Locations with high student populations – such as Nottingham, Liverpool, Manchester, Leeds and the North East – boast some of the UK’s highest rental yields.

Nottingham has come out on top, with two postcodes featuring in the top five. NG1 takes first place with an average rental yield of 11.99%, and NG7 takes fifth place with an average yield of 8.89%. It has a student population of around 37,000.

Property prices are also affordable, averaging £152,631 and £160,269 respectively – far below the UK average of £226,906.

Liverpool comes in at second place, with two postcodes in the top five. It has a student population of approximately 70,000 across its three universities. Postcode L7 has an average rental yield of 9.79%, and L1 performs well too, averaging 9.33%.

TotallyMoney’s Head of Brand & Marketing Communications, Mark Moloney, said: “With students flocking to university cities year after year and looking for a place to live, it’s no surprise the student market is a dependable one for landlords.

“Since so many students are looking for accommodation, landlords may use this as an opportunity to drum up competition between them.

“But, due to the tenant fee ban, changes in mortgage tax relief, and tighter buy-to-let lending criteria, rental profits are now being squeezed more than ever. To maximise their returns, landlords need to be savvier.”

Read more about why first year students are shunning university halls in favour of more luxurious or convenient options in the private rental sector, as well as what students want in their uni accommodation.

Scottish Rental Sector Records Positive October

Published On: November 30, 2018 at 10:23 am


Categories: Lettings News

Tags: ,,

The Scottish rental sector recorded a positive October, but this masks wide variations between the five Scottish regions, according to Your Move Scotland’s latest Rental Tracker.

Your Move Scotland found that the average rent price in the nation was £573 per month (seasonally adjusted) in October. On a non-seasonally adjusted basis, the average rent was £582.

The fastest rent price growth in October was seen in the Highlands and Islands, closely followed by the Glasgow and Clyde region. Meanwhile, declines were recorded in the East and South of Scotland regions.

Growth in Highlands and Islands

It was once again a divided picture for Scotland, with some regions recording strong growth, while others showed more modest growth or slight declines.

The Highlands and Islands was yet again the most expensive part of Scotland to rent a property, Your Move Scotland found, with the average property let for £698 per month in October. The new campus at the University of Highlands and Islands continues to attract people to the area. Similarly, Inverness Airport, where low-cost airlines operate, encourages travel both to and from the Highlands.

This region recorded the largest rent price growth of the 12 months to October, with the average property costing 14% more than it did in the same month of 2017. As such, there has been a noticeable increase in the number of English landlords buying in the area.

The next fastest growth was in the Glasgow and Clyde region. Prices here rose by 13% in the year to October, to hit an average of £613 a month. It is the third most expensive place to rent in Scotland.

Sandwiched between the two aforementioned areas is the Edinburgh and Lothians region. Prices here averaged £684 per month, following growth of 2.1% in the past year.

Each of the remaining regions saw their rent prices drop on an annual basis.

In the East of Scotland, rents fell by 1.7% year-on-year, to hit £529. The East is the cheapest region to rent in the country.

Scottish Rental Sector Records Positive October

Scottish Rental Sector Records Positive October

Finally, in the South of Scotland rents dropped by a huge 4.4%, taking the average price down to £535 per month.

When all regions are considered, the average rent price in Scotland rose by 0.2% in the year to October.

On a monthly basis, all regions were flat or saw rising average rent prices. The only region to buck this trend was the South of Scotland, where prices ticked down by 0.5%.

Letting Agent Code of Practice 

Landlords should be aware that new regulations affecting the way that letting agents in Scotland are able to conduct business on their behalf are now in place.

The Letting Agent Code of Practice was introduced on 31st January 2018, and all agencies were required to sign up to the new scheme by 30th September 2018 if they wished to continue operating in the sector.

Now, it is a criminal offence to conduct letting agency work if you aren’t on the register. Those breaking the rules could face a fine of up to £50,000 and up to six months’ imprisonment.

These rules are intended to increase professionalism in the sector, and make sure that agents are properly able to handle money received from both landlords and tenants.

Your Move Scotland encourages landlords to check that their agent is registered and is compliant with these new rules, given that they are now in place.

Rental yields are stable 

The average property investor in Scotland enjoyed a rental yield of 4.7% once again in October, according to the Rental Tracker. This is the same return as in September, but is slightly lower than the 4.8% recorded in October last year.

Despite the annual decrease, the returns enjoyed by landlords in Scotland continue to compare favourably to the yields achieved in England and Wales.

Across both nations, the average rental yield was 4.3% in October. The individual regions of England to post stronger returns than the Scottish average during the month were the North East (5.0%) and North West (4.8%).

Decline in tenant arrears

There was a small drop in the number of tenancies falling into rent arrears in October, Your Move Scotland reports.

10.4% of all tenancies faced financial difficulties of some kind last month, which is down on the 11.0% recorded in September.

On an absolute basis, the number of rental households in serious arrears – defined as two months’ or more – was 9,815 in October.

Brian Moran, the Lettings Director of Your Move Scotland, comments: “Perhaps it is the breathtaking scenery tempting people out of the city, but the demand for properties in the Highlands and Islands has grown strongly in recent times.

“Last month, it toppled Edinburgh and Lothians as the most expensive region and, in September, its excellent performance continued.”

He adds: “Landlords continue to enjoy strong returns on their investment, particularly when compared to investors south of the border. An average return of 4.7% is also strong when compared to other forms of investment.”

It’s been a Positive Autumn for the Lettings Market, Reports Your Move

Published On: November 28, 2018 at 11:22 am


Categories: Lettings News

Tags: ,,,

It’s been a positive autumn for the lettings market, according to the latest figures in Your Move’s Rental Tracker, which covers the month of October.

The South West led the way in October, with rent prices in the region rising faster than anywhere else. The average rent rose by 4.4% in the year to October, which is well above the average for England and Wales (2.2%).

Rents were down in just two regions in October – the East of England and London.

The average rent price in England and Wales was £861 on a seasonally adjusted basis, and £934 on a non-seasonally adjusted basis.

Rent prices

The standout performer in October was the South West, where a combination of strong local economic growth and high housing demand saw rents rise faster than any other region on an annual basis. A typical rent in the region was £686 in October.

But, despite the increase, the South West is still some way behind other parts of southern England. London remains the most expensive region to rent a property, at an average price of £1,271 per month.

However, rents in the capital are falling, by an average of 0.9% in the 12 months to October.

Rent prices in the East of England dropped by an average of 0.4% over the same period, with a typical property now let for £890 per month. It is the third most expensive region to rent.

Just ahead was the South East, which was the only one of the three most expensive regions to record annual rent price growth. Rents in this region – containing many London commuter hotspots – were up by 1.6%, to hit an average of £895 in October.

It's been a Positive Autumn for the Lettings Market, Reports Your Move

It’s been a Positive Autumn for the Lettings Market, Reports Your Move

At the other end of the scale, the cheapest region to rent a property in the country was the North East. Prices here rose by 0.8% in the 12 months to October, to reach an average of £535.

Elsewhere, prices in Wales were flat compared to October 2017, with rents standing at an average of £588 a month.

Month-on-month, the North East and West Midlands saw the greatest rent rises. Both regions recorded growth of 0.4% between September and October.

The North West was not far behind, and was the strongest performer of properties along the west coast. The region recorded growth of 0.3% on a monthly basis.

The East of England was the only region to record a decline in rents between September and October.

Rental yields

Each of the ten regions included in Your Move’s index posted the same average rental yield in October as it did in September.

Landlords in northern regions once again enjoyed the highest percentage returns, with average yields much higher than in southern areas.

The average landlord in the North East saw an annual yield of 5.0% in the year to October, while, in the North West, this figure stood at 4.8%.

London recorded the lowest percentage returns, at an average of 3.2%.

Across all of England and Wales, the average rental yield was 4.3%, which was the same as in September.

Rent arrears 

Between September and October, there was a decline in the number of households in rent arrears, according to the Rental Tracker.

In a boost to tenants and landlords alike, just 8.6% of tenancies had fallen behind with their rent payments in October, which is down on the 10.1% recorded in September. It is also lower than August’s total of 9.7%.

The proportion of tenants in arrears remains well below the recent and all-time highs recorded by Your Move. The all-time high of 14.6% was seen in February 2010, while the most recent high of 13.7% was recorded in July 2017.

Martyn Alderton, the National Lettings Director of Your Move, says: “The focus of the rental market has now well and truly shifted away from London. Prices in other regions are growing much faster and offering higher percentage returns for landlords.

“The South West was the star region this month, posting faster rent growth than anywhere else.”

He goes on: “Investors in the North East and North West continued to enjoy higher percentage returns than other areas, with some areas looking at a 7.5% yield. Properties by the North West coast prove to be very popular. And, with the area ideal for those who enjoy outdoor activities such as running, biking and walking, it’s understandable why tenant demand is high and why landlords are choosing to buy here.

“All in all, there are positives across much of England and Wales, including the fact that tenant arrears are falling.”

UK Lettings Market Records Autumn Spike, Reports Agency Express

Published On: November 20, 2018 at 8:59 am


Categories: Lettings News

Tags: ,

The UK lettings market recorded an autumn spike in October, according to the latest Property Activity Index from Agency Express.

Following a three-month slump, the number of properties to let across the country rose by 24.2% between September and October, while the amount of properties let was up by 8.1%.

Across the 12 individual regions included in the index, all areas recorded growth in new listings to let, while 11 saw increases in the number of properties let.

The greatest rise in October’s index was recorded in the North East. Again, following slumber activity during August and September, figures bounced back, with new listings up by a staggering 66.8% month-on-month, and the amount of properties let up by 12.3%. Annual data for the region also shows increases.

A particularly robust lettings market was also seen in the West Midlands, with new listings up by 38.0% on September, marking a record best October for the region.

Other hotspots across the country included:

Properties to let 

  • Yorkshire and the Humber: +45.1%
  • Wales: +36.4%
  • Scotland: +36.2%
  • South East: +23.6%
  • North East: +21.0%
  • Central England: +21.0%
  • London: +15.4%

Properties let 

  • London: +27.9%
  • East Anglia: +16.4%
  • South West: +13.6%
  • North East: +12.3%
  • West Midlands: +11.1%
  • Wales: +10.2%

The only region to record a decrease in this month’s Property Activity Index was the East Midlands. For a second consecutive month, the number of properties let dropped, by 8.0% in October. However, looking back at the index’s historical data, annual figures remain up.

Stephen Watson, the Managing Director of Agency Express, comments: “If we look back at historical data recorded by the Property Activity Index, we can see that a slowdown is usually anticipated in October. This month, we have seen a spike in activity. However, looking at the figures more closely, we can see that the increased number of working days (23 in October over 20 in September) has had some impact on the monthly data and, overall, the year-on-year figures remain relatively true to trend.”

UK’s Top Rental Hotspots for Landlords Revealed by Shawbrook Bank

Published On: November 13, 2018 at 8:59 am


Categories: Landlord News

Tags: ,

New analysis of the buy-to-let market presents an opportunity for landlords, revealing exactly where the top rental hotspots are for 2018/19.

Shawbrook Bank’s latest UK Buy-to-Let Report, compiled by the Centre for Economics and Business Research (Cebr), shows that, despite a barrage of tax changes making it harder to make money on buy-to-let, there are still pockets of the market where investors can achieve an average rental yield of 5.4%.

Looking at house prices, Shawbrook Bank predicts that annual growth will be more subdued in the five years to 2023 than over the last few years. The report forecasts average house price growth for the years 2017-23 to be 4.5%, compared to an average of 7.0% for the high-growth years of 2014-16.

Stretched affordability ratios, years of weak wage growth and the prospect of further interest rate rises all weigh in on the outlook for house prices in the UK for the next few years.

House price growth has slowed in London particularly, with Brexit and the resulting uncertainty regarding the future of the financial services sector in the City of London looming over activity in the prime end of the market, alongside higher Stamp Duty rates.

The report expects price growth in the capital to continue to trail behind the rest of the country for the next two years, with new figures from estate agent Aston Chase already showing that the percentage of high end purchases from overseas buyers in London’s most expensive postcodes have dropped from 44% in 2016 to 35% last year.

With investment in London slowing, the attractiveness of other regions has improved. Shawbrook Bank found that the North West and the city of Manchester, in particular, are the top new rental hotspots, due to higher yields.

Lower house prices mean that it is easier to achieve high rental yields, while Manchester is attracting students and employees from across the country. The average UK house price is currently £228,000, which is 43% higher than the typical property value in the North West, at £159,000.

The North West leads the ranking, with an average rental yield of 5.4%, followed by Scotland, at 5.3%, and Yorkshire and the Humber, at 4.9%.

Emma Cox, the Sales Director for Commercial Mortgages, says: “Landlords have had a rough ride over the past few years, with multiple tax changes, but our research shows that it’s not all doom and gloom for potential investors in 2018. Lower rental yields in London, and affordability constraints for investors, has driven interest north, where borrowers are chasing the yield and heading to locations with lower average house prices.

“There are still interesting times ahead for savvy investors and good investment opportunities remain. However, when landlords invest far away from their home turf, they can run the risk of falling foul to local knowledge. Smarter local investors may be seeing an opportunity to divest themselves of their less desirable housing stock, so it’s important for buyers to do their research to make sure they understand the local supply and demand before investing.”

Knight Frank Prime London Lettings Report shows Demand Outstripping Rental Supply

Published On: November 5, 2018 at 9:04 am


Categories: Lettings News

Tags: ,

New figures from Knight Frank show that there has been an increase in rent prices in London’s prime property market. They have risen by 1.1% in the 12 months to September, which is thought to be down to people choosing the tenant lifestyle over that of a homeowner, amid Brexit uncertainty.

According to this latest prime London lettings report from Knight Frank, there is a higher demand for let properties, than there is supply. This could also be down to the fact that more landlords are looking to leave the market due to the recent hit of tax changes, however the overall outlook for landlords staying in the market appears to be positive.

However, there has been an increasing number of landlords putting properties up for sale, which has resulted in an overall decline in supply, therefore putting increasing pressure on rent prices.

Looking at separate data collected by Rightmove, we can see that lettings listings have dropped 7% in prime central London during the year to September 2018, in comparison with 12 months previous. In outer London, this decline was 10% for prime property. The result of this has been a growth to annual rental value in prime central London, as well as annual decline in prime outer London beginning to slow.

The annual change of a 1% decrease in prime outer London is the most moderate rate of decline seen in two and a half years. One recent change that could be influencing the situation is the tenant fees ban, which Knight Frank believes could prompt more landlords to reassess the strength of their portfolios, in order to prepare for a possible increase to administrative charges.

Although the UK faces many uncertainties in relation to political changes, combined with this declining level of supply, Knight Frank has seen 6% more new tenancies agreed in the year to September 2018 than it saw a year ago.