Rents and sale prices rise which is good news for UK landlords

Landlord Expert
By Landlord Expert October 24, 2013 11:59

The buy-to-let market is in rude health as landlords benefit from record high rents, rising house prices and increasing yields.

Average monthly rents across England and Wales rose to a record high of £757 in September, up 2.1pc from the same time last year, according to the authoritative LSL Property Services’ Buy-to-Let Index. This uses data from LSL’s nationwide network of lettings agencies.

Record rents mirrored faster lettings activity. The number of new tenancies across England and Wales in September increased by 9.2pc compared to the same time last year.

LSL Property Services said total annual returns on an average rental property, taking into account capital accumulation and void periods between tenants, rose to 7.4pc in September, compared to 6.1pc in August.

It said this represents an average return of £12,129 per landlord - made up of £8,164 of rental income and £3,965 of capital gains.

House prices in August were 3.8 per cent higher than the previous year at £247,000 - topping the previous all-time high recorded in January 2008, according to the Office for National Statistics.

It said prices in London have soared 8.7 per cent in the past year, with the East Midlands seeing the second highest increase, 3.8 per cent. Only Scotland has seen a fall, 0.7 per cent.

David Whittaker, managing director of Mortgages for Business, a landlord broker, said this sweet spot is encouraging landlords to add further properties to their buy-to-let portfolios.

He said: “Rates remain low, and yields are consistently high, which is encouraging landlords to increase activity. Confidence is generally high – among both lenders and investors – which is sparking even more growth in the sector.

“Yields are higher just as landlords are starting to see prices rise more seriously too, so we’re expecting this surge of interest to continue.”

Landlord Expert
By Landlord Expert October 24, 2013 11:59

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