Average rental yields across the UK are falling, according to new statistics for May. Countrywide's Monthly Lettings Index revealed a drop of 0.1 per cent occurred last month. However, the integrated property service stresses that yields remain strong, despite declines in all regions apart from the east of England and Scotland, where rents increased by 0.2 per cent and 0.1 per cent respectively.
Yields remained the same in the south-west and the Midlands, posting a healthy 5.7 per cent and 6.5 per cent respectively. Nevertheless, the strongest yields continue to be in Wales (6.6 per cent) and the North (6.4 per cent). Two and three bedroom properties saw the greatest increase in average monthly rent, rising by 0.5 per cent and 0.3 per cent month-on-month to GBP 770 pcm and GBP 884 pcm respectively.
However, average monthly rents for one bedroom properties fell by 0.6 per cent in May to GBP 674 pcm, while four plus bedroom properties dropped by 2.1 per cent in April, taking rents to GBP 1,363 pcm. Rent arrears remained the same or fell year-on-year in all regions except Scotland and the east of England. Scotland saw a massive 4.6 per cent jump in arrears, while the east witnessed a marginal increase of 0.1 per cent. Meanwhile, the level of arrears fell for all property sizes, with three and four bedroom properties seeing the greatest declines of 1.2 per cent and one per cent respectively.
Nick Dunning, group commercial director at Countrywide plc, said: "Countrywide's second Monthly Lettings Index reveals that house prices are growing faster than average monthly rents in some parts of the country, resulting in a slight decrease in yields over the past month. Despite the decrease in yields in May, rental yields remain strong and are providing attractive returns for buy-to-let investors compared to other types of investment. The fall in average monthly rents for four plus bedroom properties reflects consumers' decisions to source cheaper properties to rent to try to keep living costs down."
- Tuesday 11 June 2013