Double Digit Bumper Returns for Investors
Buy-to-let continues to provide double-digit bumper returns for investors with rents currently rising at the fastest pace since last autumn.
The latest buy-to-let Index from Your Move and Reeds Rains shows that rents rose by 0.3% month-on-month in April, which was the fastest rate for six months, to reach an average of £793pcm across England and Wales.
Rents in the East Midlands, West Midlands and East of England are now at an all-time high.
Second only to London in absolute terms, rents in the East of England has seen a new all-time record of £848pcm in April, on the back of 4.8% rent rises over the last year. Second in terms of annual rent rises, up 6.2% on last April, the West Midlands is now home to average rents breaking through the £600pcm barrier.
However, leading England and Wales by some distance, property to rent in the East Midlands has seen annual rent rises of 8.5%. This takes rents in the region to a new all-time record of £616pcm as of April.
On a monthly basis, the fastest increases in rents were seen jointly in the East of England and the South East, both witnessing rents rise by 1% between March and April. The North East property market follows by this month-on-month measure, with rents now 0.8% higher than in March 2016. In all three of these regions the latest monthly rent rises represent an acceleration compared to relatively more subdued increases earlier this year.
Tenants are getting better at being able to manage higher rental payments, as reflected by the fact that rent in arrears fell to 8.1% of rent due in April, which compares very favorably to the all-time high of 14.6% of all rent payable in arrears – set in February 2010.
With the signs showing a strong improvement in tenant finances. Wages are finally showing a bit of exuberance with help from the raising of the National minimum wage and the introduction of a living wage coupled with the fact that employment has never been higher. But rents haven’t ever been higher either in much of the country. There is a powerful trend underpinning the affordability of renting for a large majority of Britain’s tenants, but there are also serious shortages of homes to let up and down the country.
With more change on the way along with the uncertainty of which way the UK will vote in the referendum on the 23rd June. Landlords will need to take appropriate financial advice on how changes to the tax system could affect them and anyone trying to grow their rental portfolio will now need to spend more time making the right decision
Landlords and investors, now could be a great time to get into the residential property market! With the current uncertainty though you should always seek expert advice prior to making any decision. Of course I am always available to discuss the property market then we would love to speak to you and can be contacted on 01803 472595 or drop me an email firstname.lastname@example.org and can also recommend Darnells Chartered Accountants and Business Advisers for financial advice too