The level of rental yields enjoyed by landlords across the UK showed strong growth in the past year to remain at a high point that shows how much of an investment option it remains for those with money to spend in the property sector. According to the latest published findings from LSL Property Services, rental yields went up at a time when many expected them to fall thanks to the increasing number of property buyers being helped onto the ladder by the Help to Buy scheme, released in April of last year.
It comes just days after a separate report showed that people are still looking to rent before they ever buy their first property. The study found that the average household will pay a landlord for their services for seven years before they ever manage to get themselves onto the ladder with their own home.
"Rental yields remain historically high, and such rental income is still underpinned by a demand driven lettings market. Meanwhile, rising prices are delivering an equity bonus for landlords, considerably boosting total annual returns," said David Brown, director of LSL Property Services. "Such equity growth is also an important factor for some landlords looking to remortgage existing properties to fund new purchases. As mortgage availability grows and rates seem set fair for the time being, many landlords will continue to expand their portfolios," he added.
This comes as the company revealed that rental yields in the past year across England and Wales amounted to 14.7 per cent on average. This was a substantial rise from the 11.5 per cent seen just a year earlier. The report stated that returns for the year now topped GBP 14,000, with rental income of more than GBP 7,000 and capital gains both playing a huge part in giving landlords the sort of return on investment they have come to expect from the buy to let sector ever since the financial crisis changed the face of the market in the UK.
- Friday 28 February 2014