In the face of recent public doubts, rental returns in the buy-to-let sector have held up well in the last three months, according to figures released by the Association of Letting Agents (ARLA).
Over the past three months average rental returns for flats and houses were slightly down on the previous quarter. Prime central London averaged a return of 5.5% (5.4% last quarter). In the rest of the South East returns were 5.6% (5.8%), while the rest of the UK gave returns of 6.2% (6.6%). The average nationally was 5.8% (6.0%). In monetary terms, the average rental charge was £2,681 a month in central London, £1,096 in the rest of the South East, and £875 in the rest of the UK.
The survey showed the average cost of houses and flats purchased for the buy-to-let sector was £294,900 and £172,500 respectively.
John Crossley, chairman of ARLA, said: ‘Very little has changed in the buy-to-let sector in the last three months, despite the Iraq war and the continuing volatility of the financial markets. The most significant factor is that there is no change in the average empty period. This should mean that provided investors have taken the right advice and done their calculations correctly they should have made a satisfactory long term investment.’
Void periods across the country varied from 36 days annually in central London to 27 days in the South East.