Mortgage News
Rental yields fall for fourth consecutive month
Rental yields fell by 0.5% in January following a period of intense market activity as investors rushed to purchase transactions before the end of the Stamp Duty holiday.
The latest Buy-to-Let Index from LSL Property Services revealed that rental supply rose in January as people entered the mortgage market, which pushed rents lower. Rental yields have now experienced four months of consecutive declines.
Total returns for landlords in January, which combine rental income and house price growth, were 16.7% on an annualised basis. The average landlord made a total return of £27,500 on a typical property between January 2009 and January 2010.
David Brown, commercial director of LSL Property Services, commented: “Sacrificing a few pounds a month in rent to save themselves an average of £1,600 tax on each property bought was a very shrewd move as it would take years to recoup that saving through gradual rent hikes. Now the holiday is over, it is crucial landlords do not lose sight of rents.
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