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Landlords are laughing all the way to the bank
Tue, 2011-11-29 10:41
Buy-to-let landlords are filling their pockets as rents hit record highs. The mortgage famine means rising numbers of people cannot afford to buy and so demand for rental accommodation sharply exceeds supply.
Average monthly rents across 18,000 properties in England and Wales are now £718 per month – or £29 more than a year ago – according to LSL Property Services, Britain’s biggest letting agent and owner of Your Move and Reeds Rains.
Sceptics may suspect landlords of trying to talk up rents, but the housing charity Shelter describes private rents as “unaffordable” for families on average earnings in 55 per cent of local authority areas. The charity says acute shortages of social housing have forced people who would normally qualify for subsidised housing into the private sector, raising demand and rents.
This increased average yields to 5.3 per cent, but total returns over the past year slipped to 1.8 per cent after house prices fell outside London, says David Newnes, managing director of LSL: “On a monthly basis, rents rose in all regions of England and Wales for the first time on record. As a result, rents hit record highs in six regions – London, the South East, Yorkshire and the Humber, the East of England, Wales and the East Midlands.”
There is no sign of these trends reversing soon. According to the Association of Residential Letting Agents (ARLA), three quarters of its 6,000 members claim demand outstrips supply and that the average length of tenure has hit a record high of 19 months, as tenants struggle to find better deals elsewhere.
source: Telegraph