Rents are accelerating this year, with rents up 3.6% in January on an annual basis.
LSL firms Your Move and Reeds Rains this morning said that taking into account both rental income and capital growth, the average landlord in England Wales saw total gross returns of 12% in the 12 months to January.
That equates to an average of £21,988. The average capital gain contributed £13,594 while rental income made up £8,394.
Adrian Gill, director of Your Move and Reeds Rains, said that landlords’ balance sheets were looking health but added: “Stamp duty premiums on new buy-to-let purchases are the rhino in the room.
“Everyone is talking about the 1st April deadline and the extra purchase costs are perceived by some commentators as potentially hazardous. But this is a little simplistic.
“Landlords are long-term investors and generally take good advice before making a new purchase.”
He said that any disruption to investment in supply was likely to be short term.
Separately, the Council of Mortgage Lenders said the buy-to-let sector is going through an uncertain period as it is unclear how changes to the tax treatment of the sector will affect it.
It said that current demand for homes was being led by buy-to-let landlords. It expects to see a “modest fall” in total activity in the second and third quarters of this year.
The CML also reported an estimate of £17.9bn mortgage lending in January, 21% up on last year and the highest lending total for a January since 2008.
Comments (3)
An average annual yield of 4.6% on income looks very good compared to returns from other forms of investments such as stocks, bonds and equities and the cherry on the cake is 8% capital growth too – many investors would not swap that for today’s FTSE! The question is always how is your investment performing against the market – the whole investment market!
Never been a fan of claimed returns which factor in capital growth. Hell will freeze over before you can walk into Waitrose and try to pay for your shopping on the basis that your property is currently enjoying a good capital growth.
beyond the Rhino in the room, there’s an elephant and a Hippo in guise of the Energy Act 2011 kicking in in April 2018 as current property conditions predict 10% res and 18-20% commercial properties could tag as unlawful to let.
Also tax off set will decrease 2017 – 2021
So more than a Rhino, there’s a good part of the zoo coming to many properties soon. …