Property investors with an interest in purchasing home property insurance will be encouraged by the latest findings of the Buy to Let index released this week by LSL Property Services, although it may also make them realise they may need to brush up on their geography to really succeed.
£30 increase in 12 months
The index shows that the average rental income attained by landlords in the UK now stands at a record level. The average rent per month in England and Wales now stands just £4 below £700 a month, a massive increase of £30 on May 2010 and £4 above the April 2011 figure which was a record in itself. The figures represent an increase of 4.4% on the year and that is not the end of the good news. Rental yields are still at record levels of just over 5%, with annual returns now averaging 2.9%.
Most regions see an increase
It is when the figures are broken down region by region that the differences in how landlords are faring becomes evident. Throughout the last year only two areas; the South West and the East of England, have failed to register average increases in rent, the rest of the country has seen good increases. The North East and the East Midlands saw rents shoot up by over 6% and found themselves not too far behind London, which registered a 7.8% increase.
The past 12 months for landlords in London has been something of a golden period. The stringent lending criteria demanded by banks has meant thousands upon thousands of people who would normally look to buy a property have instead had to look for rented accommodation. The result has been dramatic. Rents up by almost 8%, record rental yields, and annual returns almost 5 times the national average. It would seem that any landlord with the cash available to purchase a property and the landlord insurance policy to go with it can do no wrong in the capital; the reports of rental gazumping are getting more prevalent by the day.
The future looks rosy
The situation looks set to continue in the short term at least, and until the downturn is arrested and banks become less discerning about whom they lend to, landlords can go out and add to their portfolio with burgeoning confidence.