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Fleet Mortgages: Resi BTL rental yields up 5.6%

Jake Carter

July 16, 2021

rise hmrc

Rental yields on residential buy-to-let (BTL) properties have risen by 5.6% across England and Wales in Q2 2021, the same figure seen in Q2 2020, according to Fleet Mortgages.

This is, however, still 0.7% down on the rental yield figure for the last three-month period covering Q1 2021.

Five out of 10 regions showed a yearly increase, those being the North East, Yorkshire & Humberside, the East Midlands, the South West and East Anglia. 

However, comparing Q2 to Q1 this year does show that a number of regions have come off their high rental point posted in the first three months of the year.

Only three regions – Wales, East Anglia and the South East – showed a quarterly increase of 0.5%, 0.4% and 0.1% respectively, while the other regions all posted falls.

The North East of England posted the top rental yield regional figure for the fourth quarter running, this time reaching 8%, with Yorkshire & Humberside in second spot at 7.2%, and the North West with 6.9%.

All three regions are in the same position as Q1 this year.

Steve Cox, chief commercial officer at Fleet Mortgages, said: “In the last iteration of the rental barometer, we suggested the figures were something of a ‘red herring’ as they compared the first quarter of this year with a period just prior to lockdown one.

“These figures also cover a period half of which saw the housing market effectively closed down, so we are also cautious about the yearly comparison, particularly for Wales because it is based on limited data.

“However, our data for Q2 2021 and the first quarter of this year is very robust and gives a strong indication of the rental yields being achieved across all the regions Fleet lends in.

“We’re starting to see a degree of stability in these with a number of regions which have posted close to double-digital rental yields slipping back slightly, and those who were at the other end of the scale starting to creep up.

“There are of course exceptions to this, specifically Greater London, which has seen rental yield drop again, however this is a very complex (and often different) regional market to others within the country, and we should not think it is indicative of other regions or indeed what is to come there.

“The positives for landlords are the still strong yields being achieved pretty much right across the board, and certainly in the North we can see tenant demand continuing to outstrip supply.

“Indeed, in other regions we can view the ongoing strength of demand, as tenants seek to move to properties which may be more in keeping with a post-pandemic work/life balance.

“Overall, the PRS could clearly benefit from greater levels of supply, however landlords are adding to portfolios in order to meet this gap, and the strength of the buy-to-let investment remains undiminished.

“Which is clearly good news for advisers active in this space, who have a highly competitive buy-to-let lending market to choose from in order to support the needs of landlord borrowers.”


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