News from the Residential Property Investor, the bi-monthly magazine for RLA members other artilces from the April / May 2003 issue RPI news archive

Letting returns put at over 20 per cent - April / May 2003

Returns of over 22 per cent can be achieved on 'geared' residential property letting investments in the North West.

This is the claim of the Association of Residential Letting Agents, which puts the average return for all areas at 19 per cent.

Its figures assume a 25 per cent deposit with the remainder of purchase price financed at 5.5 per cent. Acquisition costs are put at 2 per cent, gross rental at 6 per cent of purchase price, increasing by 2 per cent per annum with 4.3 void weeks per year.

Capital growth is put at 6 per cent per annum.

Using the same formula ARLA puts current returns for 'geared' buy to let investments in London at between 17.5 and 18.2 per cent, in the South East and South West at 18.7 per cent, Midlands at 21.2 per cent, North East at 20.2 per cent, and Scotland, Wales and Northern Ireland at 21.1 per cent.
 

other artilces from the April / May 2003 issue

• Competent regulation
• Private landlords set for 'selective licensing'
• Local crackdowns on HMO landlords
• Property prospects better in the north
• Landlords shop for best mortgages
• DTI acts against property investment companies
• Letting returns put at over 20 per cent
• Average house tops £145,00
• London landlord given life sentence
• Government admits to wider anti-social problems
• In brief