The rental sector in England and Wales is seeing a notable increase, with landlords enjoying higher rental income returns on their rental properties. This surge corresponds with a continuous rise in demand for rental homes, which highlights the buy-to-let sector’s stability and appeal. We’ll look at recent statistics from Dataloft to better understand how rental yields are performing across different areas and what’s driving these encouraging results.
Prosperous Rental Market
Average gross yields are significantly higher, marking a positive turn for property owners and investors. In 2023, data on apartments bought and rented out show an average gross yield of 6.7%, a noticeable rise from 5.3% in 2021. This increase demonstrates the rental market’s potential for strong returns.
Regional Performance
Every region has experienced growth in yields, with the North West at the forefront with a striking 8.5%. This impressive progress is seen across other areas as well:
- In the North East, yields increased to 7.8% in 2023, up from 7.3%.
- Yields in Yorkshire & Humber went up to 7.0% from 6.2%.
- The East Midlands saw yields rise to 7.5%, up from 6.5%.
- The West Midlands also reached yields of 7.5%, a jump from 6.2%.
- Wales showed a yield improvement to 7.6%, up from 6.5%.
- London’s yields, despite its reputation for lower yields, increased to 5.4% from 4.3%.
- Both the South East and South West recorded gains, with yields rising to 6.5% and 6.4%, respectively, from 5.6%.
Landlord Insight
In this favorable market, landlords are feeling positive, with 66% opting to keep their current property portfolio and 13% planning to expand. Their drive to grow includes reasons such as establishing an investment business, preparing for retirement, and the belief in real estate as the safest investment option. Their confidence is reinforced by predictions that rental prices will grow faster than property sales in 2024, with an expected increase of 5%.
Future Outlook
The rental market’s strength and growth potential are evident, representing an attractive investment option for landlords. With increasing yields in every region and a positive forecast for rental growth, the sector illustrates a promising investment path.
If you’re considering joining the buy-to-let market or are looking to grow your property collection, Northwood is ready to assist you throughout your journey. Our expertise and full range of services are designed to make your investment experience smooth and successful. Get in touch with us to find out how you can benefit from the flourishing rental market and establish a secure financial future.
References
- Dataloft Rental Market Analytics
- Land Registry, reflecting £/sqft for apartments bought/rented in England and Wales
- Property Academy Landlord Survey 2023
- Zoopla
This piece references information from Dataloft among other trustworthy sources to give a detailed account of the rental market’s current state. With informed and strategic decision-making, landlords can approach the market confidently, aiming to earn the best possible returns on their investments.