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Buy-to-let investment yields 10% per year
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
There has been encouragement for buy-to-let investors with the news that there were average returns of almost 10% in England and Wales over the last twelve months.
The latest Buy-to-Let Index from Your Move and Reeds Rains shows that landlords saw gross yields rise to 5.2%, while spiralling property prices increased total average yields to 9.4%.[1]
Record Rents
Additionally, the Index shows that rents rocketed to an all-time high of £816 per month in September, in comparison to £768 at the same period last year.
What’s more, rents in London, the South-East, South-West. East and West Midlands also soared to regional records. On average, rents rose by 6.3% during the last twelve months, despite consumer price inflation becoming negative. [1]
Rents in the capital are rising at the highest rate, up by 11.6% over the year to stand at a new record of £1,301 per month.[1]
Real terms
Cumulatively, the different with inflation is much sharper. Rents are now 24.4% greater than in January 2010, with the index of CPI inflation just 14.1% higher. In real terms, rents have risen by 10.3% since the beginning of the decade.[1]
Buy-to-let investment yields 10% per year
In addition, despite rising rents, tenant finances have also grown, with rent arrears dropping to 8.6% of all rent due.
Adrian Gill, director of Reeds Rains and Your Move, noted that,’ rents are rising strongly in real terms due to the recent acceleration in wages and the much deeper and longer-term shortage of available properties across the UK.’[1]
‘Meanwhile, as the price of everyday essentials plateaus and even falls, rents are no longer following the same broad trends,’ Gill continued. ‘The cost of a place to live has now uncoupled from the cost of living.’[1]
Gill continued by stating, ‘as long as this supply and demand imbalance keeps up, it is hard to see any reversal in the speed of rent rises.’[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2015/10/buy-to-let-investors-earn-near-10-a-year
