Double-digit buy-to-let returns are back
An article in yesterday’s Sunday Times reports that in parts of London landlords have been able to return double-digit yields. During December, the property portal findaproperty.com found that gross rental yields in Greenwich topped 10.4%. Rental properties close to the site of the upcoming Olympic Games have also been reporting similar returns. This all cements the trend of rising rents and increased demand for rental housing over the last couple of years, reinforced by the continuing difficulties first-time buyers are encountering trying to get onto the property ladder.
This is all great news for investors, and the number of first-time landlords is also growing as lenders are adopting a much more favourable position to buy-to-let mortgages again. Up to a quarter of new loans are now going to people getting involved in the buy-to-let market for the first time, the highest rate since 2006.
But there’s always a downside, and in this case it appears to be tenants who might suffer, according to The Guardian which says that tenants are being priced out of the rental market in some cases. With the Olympics fast approaching, some landlords are hiking the rents in certain areas of London, often to ridiculously high rates, with tenants having to move out of their current accommodation to make way. Understandably they’re feeling hard done by, and are claiming excessive greed by landlords. Some properties close to the Olympic site are being advertised at up to £100k per week!!
So, while rising rents and increasing rental property demand is all good news for landlords and buy-to-let investors, and the future is certainly looking rosy… don’t be greedy!