Bank reports confirm rental yields increasing across the UK - Emerging Real Estate

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 Bank reports confirm rental yields increasing across the UK

Recent reports have confirmed that rental yield levels are still rising across the UK as investing in buy-to-let properties continues to prove popular.  The Bank of England has recently issued its ‘Trends in Lending’ report, which shows a significant increase in demand for buy-to-let mortgages in recent months, as rental yields continue to boom. The Bank’s report states that most UK lenders reported an increased demand for buy-to-let mortgages and this has in turn pushed rental yields even higher – rents rose in every region of the UK in September.

Similarly, Samantha Baden of Findaproperty, which recently published figures confirming that average rents have risen from £823 to £876 in the past two years, explained that “Renting is becoming increasingly popular, or necessary, across all types of household. The result is that rental yields are generating better returns than many cash or equity investments, making it an increasingly attractive prospect for those who can afford to invest”. According to LSL Property Services, average rental yields are up from 5.2% in August to 5.3% in September, while tenant arrears have dropped to their lowest level since April 2010.

The Council of Mortgage Lenders (CML) confirmed as “encouraging news” the fact that 32,000 buy-to-let loans were taken out between April and June of this year, the highest number since 2008. Despite this however, The Association of Residential Lettings Agents (ARLA), still highlight the lack of supply of quality rentable accommodation. Tim Hyatt, president of ARLA, explains that “There is a finite amount of rental property and unless both housing supply and mortgage availability improves, renters will find their options in the market are reduced”. He accused the Government of doing little to help the situation and warned that without more properties we will run out of “quality stock to offer to tenants. This is then reflected in rent increases and a lack of choice for consumers”.

Should you be interested in investing in a buy-to-let property, please do not hesitate to contact us regarding any of our excellent opportunities.