0:01 AM, 3rd July 2024, About A year ago
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Landlords across England and Wales are seeing a boost in their rental yields, according to the latest Buy to Let Rental Barometer from Fleet Mortgages.
Every region showed an increase in average yields compared to the same period last year.
The strongest growth came in the North East, where yields reached double digits at 10.1%, up 1.6% from Q2 2023.
Wales, the North West, West Midlands, and East Midlands all saw significant increases as well.
Despite some regional movement, a north-south divide remains, with northern regions still boasting the highest average yields.
However, locations in the south like Greater London and the South East also saw positive movement.
Fleet’s chief commercial officer, Steve Cox, said: “While there are few surprises within this iteration of the Rental Barometer, it’s clear the trends we have all been seeing in the wider buy to let and private rented sector continue to strengthen right across the board, fuelled by a continued supply/demand imbalance.
“Hence, we have every single region showing a year-on-year increase in average rental yields, pushing the total figure to 7.6% – a 1% increase on a year ago.”
He added: “The requirements for an ongoing strong yield are clearly not going away, particularly in a higher interest-rate environment in which many refinancing landlord borrowers are having to pay far more for their monthly mortgages than they did two/three/five years ago.
“When it comes to mortgage pricing, it showed a clear increase in quarter two, however with inflation now down to target, once we have the General Election out of the way, we would anticipate a Base Rate cut in either August or September, and swap rates will move to reflect further cuts in the not so near future.”
Fleet Mortgages attributes the rise in yields to ongoing high tenant demand and a limited supply of rental properties.
It predicts these trends will continue until the private rented sector (PRS) sees a significant increase in available homes.
Rents remain highest in Greater London at £2,024 per month, followed by East Anglia at £1,594.
The North East offers the most affordable rents, averaging £768 monthly.
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