THE PROPERTY EXPERT
RENTAL COSTS UP 3% IN 2014 According to the latest buy-to-let index from Your Move and Reeds Rains, rents in England and Wales increased by 3% over 2014 – despite falling during November and December – and the average residential rent now stands at £767, compared to £745 recorded in December 2013.
There were increases, to var ying degrees, in eight out of the 10 regions with only the Nor th East and South West recording dips.
Adrian Gill, director of estate agents Reeds Rains and Your Move, said: “Recent months have shown a divergence from usual seasonal norms. Historically, there is a tendency for rents to ease in the winter, par ticularly December. With fewer tenants willing to relocate in the festive period, landlords usually compete to fill empty proper ties and agreed rents tend to dip as a result.
“Last month that happened and rents fell compared to November but by much less than the usual extent.”
With respect to landlords, the index also showed that gross yield on a typical rental proper ty in England and Wales now stands at 5.1%, which is stable compared to the figure of 5.3% in December 2013. In absolute terms the average landlord in England and Wales has seen a return – before deductions such as mor tgage payments and maintenance – of £18,893 over the last 12 months. Within this figure rental income makes up £8,347 while the average capital gain amounts to £10,546.
Adrian Gill explained, “While total returns have fallen, they remain well over 10%. Proper ty prices have risen a little more gradually in recent months, as the purchase market experiences its own winter lull and as restraints and uncer tainties for the proper ty market have grown slightly in the latter months of 2014.
“However, that hasn’t seriously dented prospects for landlords. In fact, with rents up and yields steady, more landlords can be confident that the central determinant of their business model is holding firm.”
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