Rental Yield Growth Tipped For 2020

News at Household | 11/02/2020

It is vital landlords consider the importance of rental yield before investing in property. You should look to maximise your yield, and at Household, we are on hand to ensure you make informed decisions regarding the rental market.

Leading trends in the rental market as we move further into 2020 include:

·         A level of supply of rental property that isn’t sufficient enough to meet the level of demand from prospective tenants

·         An increase in the number of multi-tenancy properties landlords hold in their portfolio, which are more cost-effective than single-tenancy properties

·         An increase in regional purchases as landlords are less likely to be tied to property in their own area

The last point is important. Landlords realise they can get help from property management service providers, so they don’t have to be hands on in managing rental property. This has increased the ability to invest in properties with greater rental yield and which offer a better return for landlords.

Make an informed decision in the rental market

Steve Cox is the Distribution Director of Fleet Mortgages, and he said; “As can be seen by the first iteration of the Fleet Mortgages Quarterly BTL Index, despite political and economic uncertainty leading up to the General Election in December last year, we observed overall rental growth throughout England & Wales in Q4 2019, with only two regions showing either a very small drop or no change at all. In this context, it is perhaps not surprising to see those regions further North in the country posting the largest increases and outstripping the gains seen by properties in the South. On average, for 2019, for the North as a whole, this was 7.6%, compared to 4.9% in Greater London and 5.2% in the South East, although the last quarter’s figures for both those regions show an improvement.”

There have been many challenges for landlords to cover in the past two years. It is inevitable that many landlords have experienced issues with impact on their profitability. Landlords need to review their property, how they engage tenants, and how they operate in the rental market. We are here to assist local landlords make informed decisions.

Steve continued by saying; “Coupled with a much greater inclination to purchase further afield - in those very regions showing greater rental yield increases - we can see why certain regions continue to outperform others. However, with an overall squeeze on supply, coupled with continued demand for quality properties by tenants, our view is that we are likely to see continued rental increases across the vast majority of regions, if not all, during 2020. In that sense, property investment will remain increasingly popular, and we fully anticipate that all types of landlords will seek to add to portfolios over the course of the next 12 months. It means that demand for specialist buy-to-let advice will remain high and advisers active in the sector should be able to secure strong client levels, particularly those seeking to utilise limited company vehicles, purchase and refinance HMO/MUBs, and develop and grow their portfolios.”

If you plan on letting property, we can arrange a valuation for you. At Household, we aim to connect you with likely tenants, and we can help you find the most suitable tenants. When it comes to being a successful landlord in Toddington and Dunstable, we are your local agents, so contact us today.