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Rents rising more than anticipated – claim
Rents have been rising much faster than some official estimates according to Mortgages for Business, which compiles a series of lettings indices.
“Even a plain vanilla buy to let property now commands an average yield of 6.3 per cent according to our latest ‘Complex Buy to Let Index’ while a larger, multi-unit freehold block can provide a landlord with a 9.3 per cent rental yield” claims MfB managing director David Whittaker.
However, even though his indices suggest rents are rising faster than claimed by the Office for National Statistics, those rises are increasing only slightly more than inflation.
He says tenants rents across all of Britain rose by 1.7% in the 12 months to December. Across just England the rise was 1.8 per cent, in Scotland it hit 2.0 per cent but in Wales it was a miserly 0.2 per cent.
Within the English regions the biggest rises were seen in London, up 2.4 per cent, and south east England, up 2.1 per cent.
“Affordability of renting, like the affordability of most things in an unprecedented economic slump, has been squeezed. But the culprit hasn’t been excessive rent rises. That’s thanks to the vast investment that landlords are pouring into this industry, supported by a healthy buy to let mortgage market. More homes to let are keeping rents from rising at an unhealthy pace: claims Whittaker.
