Property Investment Yields Remain Stable

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Property investment yields remain stable across England and Wales according to the latest Your Move Rental Tracker.

Property investors have seen their returns squeezed by a number of factors in recent times, with new tax changes and higher purchase prices damaging profits.

However, property investment yields in May were exactly the same as in the previous month, Your Move found.

The strongest returns were to be found in the North East, where properties typically returned 5 per cent to investors. In the North West that figure was 4.8 per cent. At the other end of the scale London offered the smallest property investment yields at 3.2 per cent.

The average property investment yield across all of England and Wales was 4.3 per cent, the same figure as April but slightly down on the 4.4 per cent recorded a year ago.

Across England and Wales, the average property was let for £863 this month, representing a 0.2 per cent rise when compared to both the previous month and May 2018’ s figure. This was buoyed by strong growth in the West Midlands, where prices leapt 4.1 per cent year-on-year. On a non-seasonally adjusted basis, the average rent was £836 in May.

Your Move found that prices in the capital rose by 0.3 per cent between April and May to an average price of £1,265 per calendar month. However, on an annual basis rents were slightly down by 0.6 per cent.

London was one of only two regions to post an annual fall in rental prices. The other was the East of England, where rents dropped by 2 per cent in the last 12 months. The average rent in this region is now £874.

There was another fall in the level of tenant arrears in May, as the financial picture of renters improved once again, Your Move found. Across England and Wales 8.9 per cent of all tenancies were in arrears of some kind during the month. This is down on the 9.1 per cent recorded in April and even lower than the 9.4 per cent in both March and February.

Martyn Alderton, National Lettings Director at Your Move, felt that landlords had cause to celebrate as property investment yields remained stable compared to the last survey.

He said: ‘That, combined with the improvement in tenant arrears, shows that the property market still represents a great investment opportunity for landlords across the country.’

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