Rental Yields Are Rising

As a landlord, there is a lot to consider, even before you invest in rental property. At Just Lets Peterborough, we are here to help landlords at every stage of the letting process.

Rental yields are one of the most important factors to consider, and if you are looking for positive news regarding yields, we are here to assist you.

The importance of the rental yield

The Natwest offers this guidance on why rental yields are so vital for landlords; “The rental yield calculation is particularly useful for comparing how different properties are likely to perform. If a flat in one area has a realistic expected rental yield of 8% while an alternative on the other side of town is set to return 6%, you’re probably better off with the former – provided that you can afford to buy it and there are no differences in terms of how likely you are to find tenants.”

There will always be exceptions to the rule, but generally, the higher the rental yield, the better. If you are looking to enter the rental market, or you are keen to improve your property portfolio, you must consider the rental yield.

English rental yields are rising

Therefore, information from Fleet Mortgages which indicates rental yields are rising will be welcomed by many landlords.

Rental yields on residential buy-to-let properties rose 0.4% on the 6% yield achieved in the third quarter of 2019. Seven regions across the country have all experienced increases in rental yield. While these are challenging times, these figures offer some cause for optimism for landlords. Certainly, the rental market looks more positive than it did at the height of summer.

There will be many fresh challenges for landlords to face, but anyone looking for a reassuring sign about the current rental market can take comfort in a rising rental yield.

Steve Cox is the Distribution Director of Fleet Mortgages, and he spoke about these figures. Steve Cox said; “It’s clearly positive to see the majority of regions in England posting increases in rental yields, and those regions which have shown a very slight dip were already at relatively high levels, to begin with. We learnt from the post-Credit Crunch period over a decade ago that rents are not as susceptible to a recession as property prices, with many occupants more willing to opt for the shorter-term financial commitment offered by renting than longer-term property ownership.”

Demand for rental property is unlikely to diminish

One thing that landlords should consider is demand for rental property is unlikely to diminish. Even with the stamp duty holiday encouraging market activity, there is still going to be sizable demand for rental accommodation.

Also, some landlords are capitalising on the stamp duty holiday to expand their rental property portfolio. You still have to pay the additional stamp duty charge for an additional property, but the overall cost of buying property is lower.

Steve Cox also said; “Demand for rental property is clearly holding up in most regions and the underlying demographics suggest that property investment will remain a good choice in the years ahead. Within a shorter time-frame, the fact that – in England at least – the stamp duty holiday is available to landlord borrowers has undoubtedly been a factor in the increased interest in property investment purchases, with both new and existing landlords looking at the opportunities available, and seeking to secure the savings that are available from the holiday.”

If you are a landlord in or around Peterborough, and you need assistance in managing your rental property, we can help. We know these are challenging times for landlords, but there is a demand for rental property. When you need guidance in the local market, contact Just Lets Peterborough today, and we will be happy to help you.

You can find Just Lets Peterborough at 142 Oundle Road, Peterborough, Cambridgeshire, PE2 9PJ. Feel free to email us at peterborough@justlets.com or call us today on 01733 346255.