Boom Time for Landlords as Rental Yields Rise, Says FindaProperty.Com

Yields on rental stock continues to improve as supply falls by 14.5% in Q3. End Quote

(1888PressRelease) November 02, 2010 - Rental prices for UK properties increased by 1.4% in the third quarter of 2010, pushing them to their highest level since November 2008 and benefiting tens of thousands of buy-to-let landlords, according to the Rental Index from property website FindaProperty.com.

The rise in rental prices led to increased rental yields for landlords. The average yield rose from 4.57% in Q2 (April-June) to 4.69% in Q3 (July-September) - their highest level since October 2008.

The average rental price across the UK has increased from £839 pcm in June to £851 pcm in September.

Rental prices have been steadily rising since January with landlords now asking £47 more per month than at the start of the year - an increase of 5.8%.

And to compound the problems for renters, while prices rose between June and September, stock levels dropped a massive 14.5% over the same period. The amount of available rental stock is now 38% lower than the peak it reached in May 2009. There were fewer rental properties available in September 2010 than at any time since July 2008.

The picture across the country is variable, however. Rent in London increased by 5.1% between June and September, the highest rate of any regions, yet it fell by 3.4% in Scotland during the same period.

In the last 12 months, rental prices in London have increased by £208 pcm to £1,818 pcm, an increase of 12.9%. Rental prices here are now higher than at any time since the index was started in January 2008. Stock levels in London have fallen by 15% over the last quarter and rental yields in the capital are now at 5.1% - the second highest in the UK.

Table of rental price increases across the UK
Region Percentage increase in rental price from Q2 (Apr-Jun) and Q3 (Jul-Sep)
London 5.1%
South East 3.0%
South West 2.6%
West Midlands 1.6%
North East 0.5%
Yorkshire & Humberside 0.4%
North West -0.2%
East Anglia -1.0%
East Midlands -1.8%
Wales -2.7%
Scotland -3.4%

Nigel Lewis, property analyst at FindaProperty.com, said: "Now is a great time for buy-to-let landlords, particularly those in London and the South, with asking prices for rent continuing to rise and demand holding firm. Rental yields are now over 4.5% which is a healthy return for the landlord.

"Average rental prices are back up to where they were two years ago and I can only see them going up even further as would-be first-time buyers, simultaneously nervous about trying to buy and being priced out of the mortgage market, keep on renting.

"This is all putting increased pressure on the available rental stock which pretty much makes it a landlord's market at the moment as they can effectively name their price."

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