You are here: Home - News -

Rental income rises in H1 but yields take slight dip – BM Solutions

by:
  • 04/08/2016
  • 0
Rental income rises in H1 but yields take slight dip – BM Solutions
Rental income increased, on average, by 1.5% to £783 a month in the first half of 2016, up from £772 in H1 last year, research from BM Solutions reveals.

Tenants in Greater London, unsurprisingly, pay the highest rent handing over £1,635, on average, to landlords. London renters, however, may be given some breathing space from rising costs as monthly payments appear to have plateaued. Looking back to H1 2015, rents are now 0.4% lower.

Renters in the South East are paying the second highest rent costs at £1,065 a month followed by those in the South West who pay, on average, £830 a month. Tenants with the least costly burden reside in the north of England and Northern Ireland, paying £428 and £511 a month respectively.

Even with a rise in rental income, yields fell slightly year-on-year. Between the first six months of 2015 and the same period of 2016, average gross rental yields fell from 5.4% in H1 2015 to 5.2% in H1 2016.

BM Solutions’ research showed a distinct North-South divide with the highest yields in the North at 6.9%, followed by the North West at 6.7%, Northern Ireland with yields of 6.2% and Scotland at 6.3%. The lowest rental yields are in London at 4.5%, followed by the South East with yields of 4.8% and the South West with yields of 4.9%.

Phil Rickards, head of BM Solutions, said: “We’ve seen the average yield ease slightly and with the impact of the impending tax changes on landlords’ profitability still to be felt, some landlords will need to consider their options in order to cover a reduction in tax relief on mortgage interest. With a continued shortage of housing supply however, demand for privately rented accommodation looks sets to remain strong.”

Buy-to-let property purchases with a mortgage were strong in the second half of 2015 with transactions growing by 24% to 65,100 from 52,400 in H1 2015. Transaction numbers have almost tripled since hitting an all-time low of 23,100 in H1 2010, but remain 33% below the peak in the second half of 2006 when they reached 96,650.

The number of buy-to-let property purchases with a mortgage in the first five months of 2016 were buoyant, climbing to 57,400, with 48,800 made in Q1.

There are 0 Comment(s)

Comments are closed.

You may also be interested in