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Despite letting agency revenues being hit by the Tenant Fees Act, some buy to let investment areas have seen rental yields improve for landlords since its introduction.
The latest research by lettings management platform, Howsy, has looked at which buy to let investment areas have seen the biggest uplifts in rental yields since the tenant fee ban came into force as part of the Tenant Fees Act 2019 back in June of last year.
They looked at the average rental yield by area based on house price and rent since the ban came into force and how this compared to rental yields over the same time period prior to the ban to see which areas of England have enjoyed the biggest uplift.
Many predicted the ban on tenant fees would dampen the financial return available to the nation’s landlords and on a top level this seems to be the case, albeit only marginally. Across England rental yields since the ban have averaged 4.08 per cent, just -0.13 per cent lower than the same time period previous to its implementation.
London has seen the largest decline, with rental yields -0.18 per cent lower since June of last year, although the South West has seen a slight uplift (0.06 per cent), while the South East region has seen yields remain static.
But not everywhere has seen such stagnant movement and when looking regionally there are green shoots of positivity to be found for buy-to-let investors.
Newcastle-under-Lyme has seen the most positive movement since the ban, with the average rental yield now at 5.01 per cent, an increase of 0.49 per cent. Exeter has also seen a notable improvement with yields increasing by 0.42 per cent, while Westminster (0.37 per cent), Oxford (0.34 per cent), South Oxfordshire (0.33 per cent), Chiltern (0.33 per cent), the City of London (0.33 per cent) and Plymouth (0.30 per cent) have all seen yields increase at a rate of 0.30 per cent or more.
Within the boundaries of the capital, Camden (0.13 per cent), Bexley (0.10 per cent) and Sutton (0.09 per cent) have also seen some of the most positive changes in the rental yields available.
Founder and CEO of Howsy, Calum Brannan, commented: ‘It was widely believed that the ban on tenant fees would be the final nail in the buy to let coffin for many landlords but while top line profitability seems to have stuttered slightly, the sector is far from collapsing.
‘In fact, the resilient nature and diverse landscape of the UK rental sector means there are plenty of pockets that have actually seen yields improve and while this growth may only be marginal at present, it is a very positive sign given the short time scale.
‘As with all investments, the buy to let sector is all about knowing the market and picking the right options and if you do, bricks and mortar remain a very sound investment.’