Buy-to-let returns are still outperforming investments, according to the Association of Residential Letting Agents (ARLA).
Returns for the three months to the end of May were stable in comparison to other investments according to its latest Buy-to-Let Index.
The Association combined rental returns and capital appreciation with extraneous costs and void periods to express the movement of the sector in comparison with stock market indices. Its Cash Purchase Index demonstrated an average rate of return of 9.3% (down from 9.45%) while the average Geared Investment Return fell from 19.06% to 18.65%. Although these rates are down, they have still performed better than many other investment products.
John Crossly, chairman of ARLA, said that buy-to-let returns have continued at broadly the same level since the ARLA Index was launched last September. ‘This quarter’s indices provide ample evidence of the stable nature of buy-to-let investments. The Indices have fallen only by some three points during a period of worldwide hyper-volatility and tension and many differing reports about house prices,’ he said.
Returns on buy-to-let investments were highest in the North West and the lowest were found in central London.