Every quarter we ask leading consultancy agency BVA BDRC, in partnership with the National Residential Landlords Association, to interview a cross section of landlords and take the pulse, as it were, of the lettings market.
We’ve recently received the feedback for the second quarter of the year and the results make for some very interesting reading.
Despite the challenges faced by landlords in recent months, 87 per cent of them still generated a profit in Q2 – the highest level of profitability since the end of 2018.
The average rental yield has also increased to 5.8 per cent, up 0.5 per cent from Q1’s historic low, and the highest point for more than a year.
Landlords with between 11 and 19 properties generated the highest average yield, at 6.6 per cent.
There’s evidence to suggest there’ll be increased expansion activity in the coming year.
The proportion of landlords who say they intend to buy in the next 12 months increased by five per cent in Q2 to 17 per cent – the highest level for around four years – while the number of landlords who said they’ll reduce the number of properties in their portfolio has fallen to a three year low of 17 per cent.
This increase in interest is backed up by a recent survey carried out by online broker forum Cherry, together with Click2Check, which found that 57 per cent of intermediaries have experienced a surge in buy-to-let purchase demand in recent weeks.
While landlords in London continue to struggle, other areas of the country, particularly in the North, are performing well.
Fifty seven per cent of landlords in the North West said they were experiencing very strong or strong tenant demand, closely followed by 56 per cent of landlords in the South West, 53 per cent in the West Midlands and 52 per cent in Yorkshire and Humber.
Meanwhile, 55 per cent of landlords in Yorkshire and Humber said their business expectations for rental yield for the next three months were ‘very good or good’, with 53 per cent of landlords in the North West saying the same.
There is some good news for the wider South East region in general (excluding London) with 22 per cent of landlords saying they intend to purchase a new investment property in the next 12 months.
What the results show, despite all of the doom and gloom that’s about in the media, is that there are still profits to be made from buy to let, particularly if landlords are looking to add to their portfolios and are prepared to explore other areas of the country where they can get the most value for their investment.