Buy-to-let investors could make 15.3pc return

The average buy-to-let investor in England and Wales could make a 15.3% return over the next 12 months due to the flourishing rental market, LSL Property Services has estimated writes Ryan Bembridge.

The figure, equivalent to £26,400 per property, was calculated on the assumption that rents rise at the same rate as they have over the past three months.

The latest Buy-to-let Index from LSL shows that landlords earned an average annual return of 9.7%, or over £16,000, over the past year to February.

Average rents across England and Wales rose by 1.6% in the year to February, currently standing at £743. This is the fastest annual increase since November 2013.

David Brown, commercial director of LSL Property Services, said: “Rents are rising steadily, while property values are growing at a healthy pace. Moreover the cost of finance is at a record low.

“Looking ahead, the private rented sector is set to enjoy both solid demand from tenants and the benefits of a new lease of life for the property market as a whole.”

Average rents climbed by approximately £1 between January and February alone.

In Yorkshire and the Humber and the West Midlands however they rose by a more significant 1.2% monthly.

On an annual basis in the South West rents rose by 4.7% from February 2013 while contrastingly in the East of England they decreased by 3.1%.

Brown added: “Property to rent remains in high demand. Despite great improvements in the prospects of many first-time buyers, there are still millions of households who rely on a healthy private rented sector for their homes.

“Those looking to rent, or to let a property should look into the intricacies of their local market, which can have at least as much bearing on the level of rent as the property itself.”

Article courtesy of Mortgage Introducer

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