Buy to Let Yields on the Up, Despite Market Slowdown

Leading UK Bridging Loans Provider Notes Marked Uptick in Buy to Let Mortgage Inquiries and Applications 

Once again, the buy to let market has experienced a healthy increase in average gross rent yields, despite the market as a whole having seen a marked slowdown. For the second half of 2016, the average gross rent yield among buy to let landlords came in at 5.3%. When taking into account inflation at around 1%, this equates to a return on their investment of more than 4%. The data published by BM Solutions revealed the average monthly rental income among buy to let landlords came in at £766.

During the first few months of 2017 Bridgingloans.co.uk noted a significant spike in buy to let mortgage inquiries and applications, both from existing landlords and first-time investors. This would seem to suggest that the market slowdown has done little to deter many who are looking to invest or further their existing investment in the buy to let property market.

Strong Demand, High Confidence

“The will of the people to own a second property has not diminished due to the tax changes, but that could be due to naivety for some people due to a lack of information. Over the next few years, you could see a shift. We are still educating people about the changes – but even once we inform them, they have made their decision, they are aware and they are not waived to come off the path because the attraction outweighs the negatives in terms of income. They are looking at long-term growth.” – Michael O’Brien, director at Access Financial Services

The figures for the second half of 2016 suggest that the highest yields of all came in the north, hitting an impressive 7%. This was then followed by Northern Ireland with 6.5% and the north west with 6.4%. Further south, London came out at around 4.4% for the same period, while the south east recorded average yields of 4.9%

Unsurprisingly, Greater London brought home the highest monthly rent yields of all – a full 45% higher on average than the south east at £1,591 per month. This was also a full 108% above the average for the rest of the UK.

Temporary Turbulence

“Rental yields remain strong, still offering investors high real returns. Typically buy-to-let investors in northern areas tend to benefit from lower property values providing higher yields, whereas southern regions have the lowest yields given the higher housing costs.” – Phil Rickards, head of BM Solutions

While the slowdown last year may paint a rather negative picture, housing experts believe that it remains a very temporary slowdown and remain adamant that buy to let continues to represent a strong investment option. This would seem to be reflected in the spike in activity noted at bridgingloans.co.uk, where buy to let mortgages and similar financial products continue to pique the interests of borrowers.

About Bridgingloans.co.uk

Bridgingloans.co.uk is a leading UK finance broker & principle bridging loan funder with a unique commitment to transparency and customer service excellence. Principle bridging loan funders are offered on the back of comprehensive and digestible information to ensure rational and beneficial decision making across both domestic and professional circles alike. The team takes great pride in pioneering innovative new services to meet the short-term financial needs of UK borrowers from all walks of life. For more information or to get in touch, check out https://www.bridgingloans.co.uk