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Landlords’ returns rise to £22,000 in a year

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  • 19/02/2016
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Landlords’ returns rise to £22,000 in a year
Landlords have seen total returns from buy-to-let properties rise to the highest levels since November 2014, according to Your Move and Reeds Rains data.

With both rental income and capital growth, the average landlord in England and Wales received returns of 12%, representing £21,988 before deductions such as property maintenance and mortgage payments.

This is post-November 2014 high, when returns stood at 12.3%, and up from 11.2% in the 12 months to December.

Adrian Gill, director of Reeds Rains and Your Move, said: “Buy-to-let returns are building and property prices are picking up – as the housing shortage across the UK intensifies. Landlords’ balance sheets are looking healthier than at any point since 2014, and property investors are looking at an excellent rate of return from their portfolios.

“With house prices rising rapidly into the New Year, this acceleration will be a welcome addition to the wealth of landlords on paper, while solid rental yields are underpinning total returns pushing well into the double digits,” he said.

Average rents across England and Wales rose by 3.6% to £790 per month in January compared to the same time the previous year. Annual rent rises were highest in the East Midlands and East of England, where rents increased 5.9% and 5.8% respectively in the year to January. In contrast, rents in London rose 5.7% over the year, which was a decrease from 6.3% in December.

Rents have decreased by 1% in the South East and North East over the year. The slowest annual rent rises were seen in Wales at 0.6%.

Gill said: “There is a huge shortage of housing in the UK, particularly compared to an accelerating population and an economy that continues to outpace neighbouring countries. Meanwhile, real wages continue to rise, meaning many tenants are able to pay a little more rent if necessary. In a competitive market that is a recipe for rent rises.”

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