Attention all property investors and landlords! If you’re looking for some good news to kick off your week, we’ve got it. According to recent data, UK rental yields have increased by nearly 2.5% over the past year – that’s something worth celebrating! Whether you’re new to the game or a seasoned pro, this is an exciting time for anyone with an interest in the housing market. So grab a cuppa and settle in as we break down what this means for you and your investment portfolio.
Overview of UK Rental Yields
Since the Brexit vote in 2016, UK rental yields have been on the rise. In the past year alone, they have increased by nearly 0.5%. This is good news for landlords, investors, and also letting agents in Berkhamsted. However, it is important to remember that rental yields can fluctuate greatly. So it is crucial to monitor the market and ensure your investment is still performing well.
Factors contributing to the increase in yields
Numerous factors have contributed to the increase in rental yields in the United Kingdom over the past year:
- There has been an increase in the demand for rental properties as more people are choosing to rent rather than buy due to the current economic climate. This has led landlords to charge higher rents and achieve higher yields as a result.
- There has been a decrease in the supply of rental properties on the market as many investors have chosen to sell up or stop renting out their properties due to the recent tax changes that have made buy-to-let less profitable. This has also helped to push up rents and achieve higher yields for landlords.
- Inflation has also played a role in increasing rental yields as prices for goods and services have risen faster than wages, meaning that tenants have less disposable income and are, therefore, willing to pay less rent.
- It’s also important to consider the impact of the COVID-19 pandemic on the rental market. Many people have been forced to put their plans to buy a home on hold, either because of financial uncertainty or difficulty obtaining a mortgage. This has led to increased demand for rental properties, particularly in urban areas where homeownership is less affordable. This increased demand can put upward pressure on rental prices, which may be reflected in higher rental yields.
What does this increase mean for landlords?
For landlords, the increase in rental yields is good news, as it means that they are likely to see a higher return on their investment.
Landlords who own rental properties in areas with high demand and low supply are likely to see the biggest increase in rental yields. In addition, landlords who have professional management of their rental properties and who provide high-quality accommodation are likely to see a higher rental yield as tenants are willing to pay more for a better-quality property.
Landlords should also be aware of the potential impact of changes in tenant behaviour on rental yields. For example, with the rise of remote working, tenants may seek rental properties with additional space for home offices. Landlords who are able to provide properties with these features may charge a higher rent and see an increase in their rental yields.
The UK rental market has proven to be relatively resilient in recent years, with demand remaining strong even during periods of economic uncertainty. This makes rental property a safe bet for investors looking to preserve their capital.
Tips for maximising your rental income
- Review your rent prices regularly. Make sure you are charging market rates for your property. If you are not, you could be missing out on potential income.
- Keep your property in good condition. Tenants are more likely to renew their leases and recommend your property to others if they are happy with the condition of the unit.
- Offer amenities that tenants want. Things like on-site laundry, a fitness centre, or a pool can help attract and retain tenants.
- Be proactive about marketing your property. Make sure potential tenants know about your property by advertising online and in print media.
- Respond quickly to maintenance requests. Tenants will appreciate prompt attention to any repair needs they have.
