Rental yields increasing yet again

It has been widely reported that the demand for rental homes ahead of bought UK property has been rising for the last couple of years. This means that landlords can offer their houses for a much higher rent cost, and this is seeing them bring in far greater yields on the homes that they let out.

According to the latest report released by BM Solutions, the average rent yield for people operating in the buy-to-let sector in June of this year reached as high as 6.2 per cent.

The company said that this was showing further improvement when compared to the same month last year, when the mean yield was sitting at a flat six per cent.

Poor mortgage lending conditions, and the need for a high deposit has led to a higher number of young people getting into the private rental market, pushing yields higher.

BM Solutions also said that the average cost of rent per month had risen throughout the year. The report discovered that families are now paying £734 per month. This was a full 5.3 per cent higher than in June of 2011.
Phil Rickards, BM Solutions, said: "Nationally, average yields on buy to let properties have edged higher over the past year. A key factor pushing up yields has been rental growth in excess of five per cent. There have been significant regional variations with the biggest rise in average rents taking place in London, where demand for rental accommodation has been particularly strong."

However, landlords cannot afford to take high demand and good levels of yield for granted, and one expert has said that they need to remain competitive, with attractive properties, to make sure they find a tenant for their home.

The National Landlords' Association said that good maintenance, and a high level of marketing, such as ensuring a house is well displayed online, are good ways to make sure that potential residents are impressed enough to move into a property.