Buy-to-let property returns rising across much of the UK

Buy-to-let property returns rising across much of the UK

Buy-to-let property rental returns are rising across three-quarters of the UK, new research suggests.

Summary:

  • Buy-to-let properties generate average monthly rents of £874
  • The peak student accommodation period is over and there is underlying strength in the private rented sector
  • Many tenants choose to rent, seeking the increased flexibility it provides

The chances are that buy-to-let property investments are earning more money for their owners now than at this point last year.

New research from Home Let shows nine out of the 12 UK regions experienced a year-on-year rental price rise in November.

According to the monthly index, the average property investor is earning £874 gross rent a month from each of their assets. Buy-to-let property in Scotland is currently the best performing in the UK, with rental prices rising 11.7% over the course of 2014.

Historically, this time of year sees rental prices dip from the peak early autumn months. September and October rental figures are buoyed by the large number of new tenants moving into student accommodation, but Home Let explained the latest figures show the underlying strength of the UK’s buy-to-let sector.

Martin Totty, Chief Executive Officer of the Barbon Insurance Group, of which Home Let is part, said: “The outlook for the private rented sector remains positive for several reasons, the pace of house building is unlikely to have a significant effect on the supply of property to buy or to rent in the short term, high house prices, and a mortgage market where lending criteria remains constrained, are combining to ensure that the demand from tenants needing rented accommodation remains strong.”

Earlier research by both Knight Frank and Savills also revealed that many people are actively opting to live in rented accommodation even though they can afford to purchase their own property, citing the increased flexibility this brings to their lifestyle as the decisive factor.

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