Wednesday, May 2, 2007

Looks as though the BTL market may start struggling

Rental Yields Continue Downward Spiral

According to Landlord Mortgages, rental yields (the percentage a property’s value earned in rent every year) are slowly sinking because the investment market is governed by two factors: high house price growth and relatively static rents.Scottish yields show the largest drop, falling from 6.8 per cent (Q4 2006) to 5.9 per cent (Q1 2007). Less dramatic declines were recorded in England (5.8 per cent to 5.7 per cent) and London (5.9 per cent to 5.7 per cent).

Posted by frank f @ 09:18 PM (468 views)
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9 thoughts on “Looks as though the BTL market may start struggling

  • We were only told a couple of weeks ago by Foxtons, that rents had leapt 20%.

    Here they’re ‘relatively static’.

    Hmmmm.

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  • Be aware those are gross yields i.e. landlords have to pay regular service charges and maintenance and that of course before income taxes. Real yields are even lower, allowing for say 10% empty periods. I cant believe so called investors want to do that!

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  • Davros,
    it may depend on the particular area you are looking at, but do not trust Foxtons, just search the internet.
    Landlords increasingly desperate (many of them overstretched and very low on cash) and are giving mandate to multiple agencies and you will find the same property at 2 or 3 different prices (sure lower than Foxtons)
    for whatever my opinion is worth… in central london rents dipped in 2003/04 and are now back just below the 2000 level, but… with a massive number of empty properties on the market, and people relocating to the commuter belt.
    the question in london is that the property to let supply has gone up massively in the past 5/6 years. look at the amount of renovations, buy to lets, converted houses, new developments…
    my 2 pence advice is bargain hard and show that u are a trustworthy / liquid person and that you want to rent for a long period (property voids are the landlord nightmare!)

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  • With the stock market starting to boom again maybe it’s time to sell that buy to let and invest in equities. As one bubble deflates another inflates.

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  • sold 2 rent 1 says:

    mrmickey

    “As one bubble deflates another inflates”

    Not this time IMHO.

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  • tyrellcorporation says:

    I moved into a newish 4 bed town-house style building (rental) in February. They were asking £1100 a month and I went in with an offer of £950 – they accepted. Just prior to this I’d put in an offer of £1000 on a similar property which was on for £1200, they accepted that too (although I decided on the current one in the end). Other people I know who are renting were astonished, for some reason they just didn’t think that the rent was negotiable… weird eh?

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  • Tipping Point says:

    Isn’t it about time TONIGHT devoted a whole eposode on Buy to Debt: “They gave up their jobs to become property magnets only to find that they would loose everything………”

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  • I think you will find when we soon get a government that has real immigration control there will be more rental properties about than tenants to fill them, then you will see rents plummet as there is a scrabble to get some kind of return, at that point you wont be able to sell a house either, i can see some making their own gallows by then – Oh Dear.

    I have always said love them or loath them stocks and shares sell at the push of a button, houses however !!!!!!!

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  • Foxtons are disreputable liars.

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