Rental yields on BTL properties in England rise 0.4% in Q3

Rental yields on residential buy-to-let properties climbed to 6.4% across England during the third quarter, up 0.4% from the 6% achieved in the third quarter of 2019, according to the latest Fleet Mortgages Buy-to-Let Rental Barometer.

The regional snapshot covers all the areas in which Fleet lends in England, highlighting the rental yield changes that have occurred in each region.

The lender revealed that the North East of England posted the top rental yield regional figure for the quarter, up 2% year-on-year to 8.8%, while only the North West and the East Midlands showed slight drops in rental yields.

Last quarter, only three regions posted positive rental yields over the period although this time Fleet recorded seven regions – North East, Yorkshire & Humberside, West Midlands, East Anglia, South West & Wales, South East and Greater London – that posted increases.

The lender suggested its overall data showed a more positive picture than three months ago – when valuers had only just started carrying out physical valuations after the easing of lockdown – with a greater number of transactions and rental valuations showing the strength of the private rental sector during the summer and through into autumn.

“It’s clearly positive to see the majority of regions in England posting increases in rental yields, and those regions which have showed a very slight dip were already at relatively high levels to begin with,” said Fleet distribution director, Steve Cox.

“Demand for rental property is clearly holding up in most regions and the underlying demographics suggest that property investment will remain a good choice in the years ahead.

“Within a shorter time-frame, the fact that – in England at least – the stamp duty holiday is available to landlord borrowers has undoubtedly been a factor in the increased interest in property investment purchases, with both new and existing landlords looking at the opportunities available, and seeking to secure the savings that are available from the holiday.

“Our next iteration of the Barometer will give us more evidence on the robustness of rental yields and whether the potential impacts of COVID-19 on households and living arrangements are playing out as they are perceived to be.”

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