Rental yields stabilise
Rental yield figures released today by Landlord Mortgages, the UK’s largest specialist buy-to-let broker, show that rental yields in England and Scotland rose fractionally in January after five months of successive falls in England and seven in Scotland.
Across England rental yields have saw a minimal rise in January of 0.02% points from 6.03% to 6.05 and those in Scotland jumped 0.11% points from 6.88% to 6.99%.
This development points to a stabilising market picture, which can also be seen in the figures for London, where yields have also seen a small rise. Compared to rental yields from a year ago England however has seen a fall from 6.28% in January 2004 to the current figure of 6.05%.
Scotland still offers the highest yields
Scotland, which has repeatedly outperformed the rest of the UK for the past two-and-a-half years, saw an increase in rental yields of 0.11% points (from 6.88% to 6.99%) in January compared to the previous month. In addition Scottish market rental yields have only fallen by 0.1% points over the past year. The figures also show that rental yields within London have increased by 0.03% points in January, from 5.96% to 5.99%, over the last month.
Source Landlord Mortgages
Lee Grandin, Managing Director of Landlord Mortgages, comments:
“Rental yields across the country stabilised in January indicating the maturity of the buy to let sector in most parts of the country; demand and supply are now in balance after a softening of yields over the past three years.”
“This is good news for landlords who can now expect to benefit from stable and potentially increasing revenues, and fewer void periods.
Investors in search of the highest rental yields should consider Scotland but in addition all good, well located city and commuter properties are not experiencing void periods as potential buyers, particularly potential first-time buyers, stay out of the market.”
Let-to-buy 'not a buy-to-let competitor'
The
let-to-buy mortgage market is not competing with the
buy-to-let market, it has been claimed.
Andy Jones, corporate and lettings business director with estate agency network Your Move, said that while buy-to-let was a property mortgage product, let-to-buy was "more about a concept".
A let-to-buy mortgage involves the borrower's current property being let to tenants while the rental income is used to cover the mortgage payments on a new property which is bought as the main home for the borrower.
Mr Jones explained that buy-to-let generally attracted property investors who were looking to invest in a number of properties.
However, let-to-buy is more about an opportunity, he said, for consumers who want to move on to a different location and buy a home there, but may need to come back to where they were.
He commented: "It's more about the concept, which is of freeing up property, because of a circumstance: 'I want to retain my property and let it out and buy somewhere else because I'm relocating and I can then build a portfolio that may go on towards a pension plan at the end'."
Recent figures from the Mortgage Trust show that a quarter of buy-to-let investors say that their main reason for buying rental property is so that it can serve as a retirement fund.
Landlord Mortgages “We do arrange a good level of Let To Buy Mortgages but clearly they do not compare with Buy To Let Mortgages, but then why should they?”
