Kespada

The average national rental yield rose by 0.5% during May, according to the latest report released by LSL Property Services.

There was a great deal of regional variation with landlords in some areas enjoying far higher income increases than those in other parts of the country. Buy to let property owners in the West Midlands would have been particularly pleased as they saw an increase of 2.1% during May.

The landlords of London take in a great deal more rental income than rental property owners in other, less prosperous, areas of the country. Whereas a landlord in the capital can expect an average monthly yield of £924, people with lettings in the West Midlands will see an average monthly rental income of £540.

There is a great deal of optimism in the prospects of the Private Rental Sector and there are signs that people are planning to invest more money in accommodation to let. This news comes amid continuing concerns over the instability of the British economy.

David Brown, Commercial Director of LSL Property Services, said, ‘house price increases have steadied, and rental income is now accounting for an increasing portion of a landlord’s total return. Rents have continued their upwards climb and are just £21 short of their all-time high’.

Landlords have an enjoyed total returns of 13.2% on their buy to let investments during the last year. The average rental property owner is making £20,363 per annum, made up of £7,100 in rent and £13,263 in capital gain.

The average price of rented properties also increased, but not at quite the same rate as the rise in rental yields. The national average rise in the value of buy to let homes was 8.6% during the last year.

‘The fundamentals of sound property investment – tenant demand, yield and rental income – are in place for the buy-to-let recovery to continue apace. But we need to wait for the budget. If the government proceeds with its short-sighted plan to impose a higher Capital Gains Tax on the private rented sector, it will risk bringing the recovery to a juddering halt – especially if neither taper relief nor indexation allowance accompany the hike’, Mr Brown commented.

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