Larger yields seen as a benefit for landlords

December 7, 2011

CIA Let Property Blog

In the three months leading up to October, landlords have seen larger yields on their rental property due to increasing tenant demand and rising rental prices. These are from the latest figures from the Royal institution for chartered surveyors (RICS).

Buy-to-let landlords and people who are looking into investing into this market will see this as good news. With demand continuing, this will be the seventh quarter where yields have increased.

Rent increases were experienced by 19% of surveyors (from the RICS data), rental prices are set to continue to rise with demand increasing for rental property.

Sellers who are trying to sell their properties are struggling to do so as there are no buyers out there, they are now turning to renting and becoming landlords. More landlords issued instructions to rent in the third quarter, leading to a net balance rise to +10% – the fastest growth since early 2009*

James Scott-Lee, RICS spokesperson said that the bleak economic message made by the Chancellor in his autumn statement is to blame.

“Despite a measure of resistance to rising rent levels from tenants, in some parts of the country the imbalance between demand and supply for rented property suggests that for the foreseeable future landlords will have a good if not increasing return on their investments in comparison with other main stream options,” he said.

 

 

*Source- Mortgages.co.uk

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