Average rental yields increase across the UK
Buy to let investors across the UK saw a rental yield of 6.1% in 2011 with the average monthly rent climbing to £716 from £682 in 2010, according to new figures from BM Solutions.
While 2011 rental yields were marginally lower than the previous year when they were 6.2%, they remained buoyed by continued rental increases across the UK.
The North of the country saw higher rental yields than the south, the research shows. The highest was 7% in the North followed by the North West and Yorkshire and Humber both at 6.3%. In Wales yields increased 6% and in the West Midlands and the East Midlands there was a rise of 5.9%.
The southern half of the country saw yields rise but below the national average. In Greater London they were up 4.8%, up 5% in the South West, up 5.3% in East Anglia and up 5.2% in the South East.
While the national average monthly rent increased by 4.8% overall, there are more significant gains in regional areas. The largest increases were in East Anglia at 8% and the North at 6.9%. The South East and Greater London recorded rises of 5.8% and 5.6% respectively. In contrast, rents increased by just 0.1% in Wales and 0.7% in Scotland.
Average rents in London were more than twice the national average at £1,212 per month. The average monthly rent in the capital is 69% higher than UK average of £716 and 41% above that in the South East at £858, the next highest region.
The lowest average rents are in Wales at £474 per month, and in the North and Yorkshire and the Humber both are £488 per month.
‘There is a very healthy demand for rental properties across the UK right now, which in part may be driven by the costs associated with buying a home: costs which, for some, will only increase as the stamp duty holiday has ended,’ said Phil Rickards of BM Solutions.
‘Average gross yields on a buy to let property have been just over 6% for the past two years, driven by growth in rental values. However, with house prices likely to remain broadly flat again this year, buy to let landlords can again expect little capital gain on their investment in 2012,’ he added.