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UK PRS Landlords Expect Tenant Demand To Increase

UK PRS Landlords Expect Tenant Demand To Increase

42% Of UK PRS Landlords Plan 2014 Rent Increases

According to the latest survey by specialist house share website, Spareroom.co.uk, 42% of UK private rented sector landlords expect to increase rental prices over the next 12 months and of those some 26% are planning to increase rents by more than 3%, which is significantly higher than inflation.

In their latest Rental Index, Spareroom revealed the average cost of a double bedroom in a shared house increased by 4.5% in the final quarter of 2013, reaching a new average of £507 (GBP) per calendar month.

Room rents in London also saw a rise in prices, with an increase of 2% over the same time frame, meaning the average cost of a double room in a shared house in the nation’s capital is now at an average cost of £676 (GBP) per calendar month.

Whilst some landlords plan to increase rental prices, 58% of Spareroom’s Rental Index respondents stated that they will not be raising rents and 5% of UK PRS landlords claimed that they intend to reduce rents during 2014. 

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Rental Yields Drop As UK Residential Property Prices Rise

Rental Yields Drop As UK Residential Property Prices Rise

Property Price Increases Wipe Out Landlord Rental Yields

Residential property prices are rising so fast that they are outstripping rental price increases and some private sector landlords’ rental yields are suffering.

Landlord rental yields in the UK private rented sector (PRS) have fallen almost everywhere in the UK, and any rise in the rental prices are being outpaced by rising residential property prices.

Countrywide have said that in May 2013, rental yields declined everywhere in the UK except in the East of England (up 0.2% to 6.2%) and Scotland (up 0.1% to 5.8)

Rental yields in the South-West and the Midlands remained the same at 5.7% and 6.5% respectively. The greatest rental yields in the UK PRS are being achieved by landlords who own rental properties in Wales (6.6%), the Midlands (6.5%) and the North (6.4%).

Average monthly rents on two- and three-bedroom properties in the UK private rented sector increased up by 0.5% and 0.3% in May to £770 (GBP)and £884 (GBP) respectively, but rental prices for one-bed properties fell by 0.6% to £674 (GBP) and rents on four-bed properties were also down by 2.1% to £1,363 (GBP).

Wales had the greatest increase in average monthly rental prices, up 4.9% on April 2013, followed by Scotland (up 2.2%), the North (up 1%) and South-West (up 0.5%).

Despite some regional increases, the average monthly rental price in England, Scotland and Wales fell by 0.2% in May 2013, but rents are still 0.8% higher when viewed year-on-year.

The Midlands has seen the greatest decrease in average monthly rents, down 1.4% month-on-month, followed by the South-East and central London, both down 1.3%. Scotland has the lowest average monthly rent at £617 (GBP) per calendar month (pcm) and central London the highest at £2,340 (GBP) pcm.

Countrywide have taken their data from over 5,000 rental properties in the UK.

Nick Dunning, Commercial director at Countrywide said: “Despite the decrease in yields in May, rental yields remain strong and are providing attractive returns for buy-to-let property investors compared to other types of investment.”

Specialist Insurance can help landlords profit from property

Specialist Insurance can help landlords avoid tenant rent default

In the UK private rented sector, the average rent for a residential property now stands at a staggering £777 (GBP) per month across the whole of the country but there are some regional differences.

Private sector rents in Greater London rose by 6.7% during the last 12 months to reach a regional average of £1,224 (GBP) per calendar month (pcm).

In stark contrast, PRS tenants in the North-East living in similar sized properties are paying an average rent of just £512 (GBP) pcm.

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Single-Let And Small Scale Landlords Account For Up To

 80% of All New UK Mortgage Applications.

There has been a large rise in the number of ‘Single-Let Landlords’ (landlords with just one buy-to-let property), and small scale landlords (those typically with less than four properties), over recent months up to November 2012.

Rise In Single Let Landlords Accounts For 80% Of All New Mortgage Applications

Rise In Single Let Landlords Accounts For 80% Of All New Mortgage Applications

This is the result of many new investors being drawn in to the buy to let markets by high rents and increasing yields. Average private residential property rents have risen month on month over the last nine months and it is now estimated that Single Let and small scale Landlordsnow account for approximately 80 % of all new buy to let mortgage applications.

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