A report from Paragon Mortgages seems to show that tenant demand has risen further during the third quarter of 2015.
The survey of almost 2,000 landlords also showed that rental yields and annual rental income as a percentage of a property value has remained fairly constant throughout 2015.
Increase
Results from the report indicate good news for buy-to-let landlords, with rental yields averaging at 5.6% across the country in Q3. 17% of landlords reported yields between 3% and 4%, with one in ten landlords recording yields of 10% or more.
Yorkshire and the Humber recorded the largest yields in the period with 6.1%, while London reported the lowest with 4.8%. This was surprising considering the capital has the second largest increase in levels of renter demand.
In the East of England, 52% of landlords reported an increase in demand, which was the highest of any area in Q3. This figure dropped to 31% for the North East. Nationally, an average of 41% of landlords said that demand had risen in the period.
This shows a strong annual increase in demand across the country. Demand in the North East has risen from 23% to 31% and in outer London from 42% to 48%.
Strong
‘This research shows that yields and tenant demand have remained strong throughout Q3, in common with 2015 overall,’ said John Heron, director of mortgages at Paragon. ‘The figures reflect a steadily improving economic outlook for the UK as a whole and show that, more and more people are actively choosing the flexibility of making a home in the private rented sector.’[1]
‘Yields too have remained stable throughout 2015. Q3’s data shows London and the South East slowing down somewhat, while yields in the region are growing. This represents a welcome rebalancing of the national economy, with some of the heat from London’s economy escaping the M25 and being distributed around the country,’ he added.[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2015/12/tenant-demand-continues-to-grow-in-q3-while-yields-remain-stable