Rental Yields – Chart of the top 50 areas in England and Wales

It seems to me there’s a few possible ways to produce such data:

ARLA produces its reports quite regularly – but it recognises the limits on the amount of data it has and I think it doesn’t go below regional level. (Presumably RLA/NLA could have a stab at something similar but their house price data for yield calculation might be less accurate than ARLA’s estimates (maybe that’s another thread entirely)

Lenders – most notably Halifax and Nationwide produce their HPI figures, presumably they could produce filtered rental versions, after all they have loads (what do they have about 40-50% of the BTL market between them?) of valuations that give both sale price and estimated rental price.

And reading the top of the original post it says ONS and Land Registry – I would guess the ONS data might be VOA reported rents as they’re quite keen to collect such information as it helps with setting the LHA (presumably it’s used for other things too)

An excellent reference for the Taxman to see how much Landlords should be roughly getting for each house.

I think if an area has wide range of property prices, Landlords may generally on average pay lesser prices.

Mark, Rent Officers take rents from Landlords & then give the average to the DWP LHA people, so the LHA people can lower us even more.

Reply to the comment left by “Vanessa Warwick” at “29/05/2014 – 11:27“:

I totally agree Vanessa, that’s one of the reasons I love bungalows so much.

Baby boomers will all want one eventually and there have been very few built in the last 40 years 🙂
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Reply to the comment left by “Mark Alexander” at “29/05/2014 – 11:39“:

PS – bungalows have arguably the best possible growth prospect for the reasons I have quoted above. However, yields are comparatively poor. That doesn’t make them good, bad or even average investments though as it really depends on what you needs and strategies are. Somebody who needs cashflow would rarely consider investing into a bungalow for instance.
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Whilst I think this is a good peice of work, it’s only half the picture.

The yield on any property investment is comprised of two parts, the rental element and the capital element. How much the capital value of the asset increases, or otherwise, during the term.

It’s important because the investor tends to take the rent as income and the capital appreciation as ‘savings’.

So the sensible investor looks for both elements to be healthy.

So if you buy a property in a depressed area where property prices are not really doing anything you’ll end up with something that is worth the same when you sell it, while everyone else is a bit richer because their asset has appreciated.

Reply to the comment left by “John Daley” at “29/05/2014 – 12:37“:

My point entirely John, hence the reference to bungalows.

The OAP’s who tend to want them rarely want to purchase a “project”. They don’t want the hassle.

The trick, therefore, is to buy a tired one cheaply, modernise to add value and either flip it for a quick return or hold it as a long term investment whilst accepting that yield of cost might be OK but that yield on value will be considerably lower that other forms of investment.

As another commenter has mentioned, cashflow is important and capital appreciation is a bonus. Nevertheless, if you buy the right bungalows and don’t go too crazy on gearing up to the max you can have decent cashflow and also better than average prospect for capital appreciation – in my opinion anyway.
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The table gives a useful bench mark, choose areas from it that are within a 1hr drive of home, then aim to beat the yield is shows.

Reply to the comment left by “Vanessa Warwick” at “29/05/2014 – 11:03“:

I’m with you on this one: the figures are of no use whatsoever.

In general I would expect that landlords buy below average priced properties because that is where the demand is (one and two bed places in my case)

I’ve done some rough sums on my properties and I should be at the top of the table, but no Yeovil or Somerset to be seen!

@MdeB Thanks for commenting.

@Mark
I like bungalows too Mark.

Only 300 (on average) are built per year.

Unfortunately, most people like the big plot size and development potential and knock them down! 🙁

Bungalows are a dying breed … but with scarcity comes value …

Just saw this on twitter and thought it a useful illustration of how average averages are! 🙂

London #population projected to grow 13% by 2022 http://t.co/MpizBMnvf7 How affordable will the city be in 8yrs time? pic.twitter.com/fD07xv6X5S

— Naomi Clayton (@Naomi_Cities) May 29, 2014