23 Jun LONDON LANDLORDS
London landlords had the biggest gains from their rental properties last year, this is all due to the property prices rocketing. Potential buy-to-let investors looking to start or expand their portfolios are advised in a new report to start looking north for better yields, Home House Buyers buy all sorts of investment property in any condition or location from struggling London landlords. Data from the latest report shows the average yield to be in the region of 15.1% this is a result of the property price increase over the last year.
In our view at Home House Buyers there are better deals to be had in the North of England, the average yield for London landlords is 4.3% compared with landlords in the North West which is 7.1%, this is because the price of property is a lot cheaper while the rents are relatively higher. Even though the yield in these areas are terrific this doesn’t indicate a good investment, a lot of the time in these impoverished areas you can receive a great yield but no capital growth or price falls.
For most London landlords, the capital growth was the biggest component to their total yield, this is just paper profit that requires a sale to realise the yield.
After London’s total return of 15.1 per cent, the next most lucrative regions for landlords were the East of England at 13.6 per cent and the South East at 13.3 per cent.
The rise in property prices has driven the rental yields down, at the beginning year the average rental yield was 5% and now it’s at 4.8%. At the start of last year, the highest yields to be found were in the North West 7.1% then Yorkshire and Humberside at 6.4%.
The fact that the increase in house prices and rents have made it easier for landlords to add to their portfolios, according to the report, landlords will be able to raise enough from their capital growth in 10 year to pay for a deposit on a new property.