Allow Landlords to evict tenants where there are 14 days rent arrears14:34 PM, 1st October 2020
About 4 weeks ago 99
Rents are edging back to highest ever levels as the average UK buy to let rent hit £676, according to monthly data from one of the UK’s largest letting agents, LSL Property Services.
The cost of renting a private home rose 0.5% in July – the sixth monthly increase in a row and a 1.4% jump from June 2010.
Year-on-year, rents are 2.3% up and are £12 shy of the highest recorded figures of an average £688 per month seen in 2008.
Tenant arrears fell to 9.2% of all rent from 11.2% at the turn of the year, and are at the lowest level since LSL started compiling figures in 2008.
In July, £212.9 million of rent was unpaid – a significantly less than the peak of £361 million in August 2008.
About 434,800 tenants fell into arrears in July – 26,761 less than in June.
The drop in arrears means that the average yield, adjusted for voids and arrears, was 4.5% in July – an increase from 4.4% in June.
Because of declining house prices, the total return from investing in buy to let over the last year dropped slightly to 10.1% in July. The average landlord received a total return of £15,961 in the past year, £8,706 in capital gains and £7,255 in rental income.
An investor buying now could expect a total annual return of 3.5%, the equivalent of £5,838. The lack of house price inflation in the past three months means that if conditions remain constant, all of these gains will be driven by rent. “Rents are still playing catch-up with the gains house prices made in the last year,” said David Brown, LSL’s commercial director. “The recovery in prices 12 months ago caused an exodus of accidental landlords from the market, ending the glut of supply of rental accommodation.
“Although house price rises have levelled off, landlords are still reaping the benefits of the constrained supply, and the improving yields have restored a healthier balance to the dynamics of property investment.
“And we don’t expect rents to fall away any time soon. With inflation well above the Bank of England’s target, interest rates can only go one way, north. When they rise, many landlords will face increased monthly mortgage repayments, and many will try to raise their rents to cover the difference.”
LSL brands include letting agents Your Move and Reed Rains.
Despite the fact that lenders have increased their margins, the cost of borrowing remains at an all time low. New buy-to-let mortgage business is coming from two sources;
Please remember that buy-to-let mortgage quotations are available to you 24/7 – simply click here
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