Beating the Bank Returns
Today’s investment market is a tricky proposition, with low yields on savings from banks and building societies, buy-to-let residential properties still represent some of the highest returns available for a relatively low-risk investment. Supported by record-low mortgage borrowing rates, solid demand from tenants and stable yields, buy-to-let is often the investment of choice.
Despite the challenges posed by tax and regulatory changes investment in buy-to-let continues to outperform the vast majority of asset classes as demand for rental homes continues to grow.
The property market still represents a great investment opportunity for landlords across the country.
Rental Returns Increasing
According to the Your Move rental tracker, the average property across England and Wales was let for a monthly rent of £863. Specific regions to see strong price growth were the South West, where prices grew 2.8% to hit £701pcm, and the North West, which saw a price rise of 2.4% to £648pcm.
Not only is rental yield already strong it is continuing to see strong growth. The only area bucking the positive trend was London which posted a reduction of 0.2%, however, since it is still the strongest region for prices, with an average of £1,265, the drop will have a negligible effect on the overall profitability of properties in this region.
Both the West Midlands and Wales saw prices grow strongly on a monthly basis.
The West Midlands was once again the star performer in the regional lettings market, with price growth of 4.1% in the last year.
“This helped the rental market grow overall, given rents in London and the East of England have fallen in the same period. However, strong monthly growth in the capital shows the London market may have turned a corner.”
So while there is variation within the market, the fact that interest rates are historically low, and unlikely to rise significantly any time soon, the demand for rentals is increasing and the stability of having a property with a long term tenant means that buy to let property is still an incredibly sensible investment.