News from the Residential Property Investor, the bi-monthly magazine for RLA members other artilces from the April / May 04 issue RPI news archive

Private rented sector 'stable' - April / May 2004

Landlords can expect an average return on geared investment in rental properties of 23.21 per cent over five years, according to the Association of Residential Letting Agents.

The figure, which includes both rental income and capital appreciation, is 0.83 per cent down on the last quarter of 2003.

Highest rates of return are being achieved in the north west (25.26 per cent), lowest in central London (22.32 per cent).

While rents received have risen since the second quarter of last year, yields have fallen against the continuing increase in capital value, the agents' association explained.

'Anyone who tries to report that the buy to let market and the private rented sector are unstable is not reading the figures correctly', commented ARLA president Robert Jordan. 'The market remains stable and, as our recent investor survey shows, the average investor landlord is expecting to hold his or her property investments for between 10 and 20 years. This shows a full understanding of the buy to let market and contra-cyclical nature of house price inflation and rental demand'.

Meanwhile Paragon Mortgages has reported 'a significant upturn in yields' in April.

'With demand for rented accommodation from tenants steady or growing in many areas, landlords have been able to achieve higher rental yields, not withstanding the continued rises in property values we've been seeing recently', commented managing director John Heron.

Paragon put the April yield at 7.22 per cent.
 

other artilces from the April / May 2004 issue

• Standard response
• Agents and lenders are in bullish mood
• Landlords advised to check small print
• Landlord and agent pay for safety lapses
• Private rented sector 'stable'
• Manchester students look at becoming landlords
• Landlords leaving London market
• Local Housing Allowance to include landlord safeguards
• Landlord training
• Council threatens evictions over own delays
• In brief
• OFT calls for greater controls on estate agents
• Chancellor freezes stamp duty rates
• Pension possibilities