Excellent rental yields drawing new investors into private sector

As yet another letting agency reveals that clients are achieving record rental incomes, it appears that news of the burgeoning profits in the private letting sector is spreading. The same report by findaproperty.com also reveals that private investors are snapping up the cheapest landlord insurance in their droves as they look to get a good return on their savings.

Property a better bet than banks

According to the online letting agency, landlords are now achieving rental yields on average of 4.75%, this is much better than the returns investors can make on traditional bank saving accounts and almost double the average returns on ISA’s. The fall in share prices and the uncertainty in the money markets caused by the troubles of the Euro and the American dollar have not gone unnoticed by investors and the report shows an increase of 10% in the number of prospective homes tenants now have to choose from. The UK letting sector is experiencing a boom like never before.

London Leads

Of course it is the capital that is leading the way and this is because most overseas investors looking for a safe place for their money are being sucked into the London property market. However, in the short term this should have a ripple effect as some UK landlords look to purchase buy to let property insurance on homes in the suburbs as they are being forced out of the capital by inflated property prices. The report certainly seems to suggest that this may be the case.

Regions cashing in as well

Landlords in London are setting records month by month and according to findaproperty.com the average is now just £21 short of £2000 per calendar month. This is more than 3 times the rent a landlord in the North East can expect from his property, where the average rate for the last quarter came in at £582. This was still an increase though and in fact, according to the report the only region of the country not to have reflected increases in rent was the West Midlands where landlords experienced a 0.03% fall in rents.

Golden years

On the whole the survey found the average rent across the UK to be £876, easily a record and the only question for excited landlords is this; will the influx of homes coming onto the market put the brakes on this golden period of rental bliss?