Yields in North lead national rental picture
Property investors in the north of England have seen the best results in new figures on the rental market that have just been released.
Your Move’s survey of around 20,000 properties in England and Wales in November showed much higher rental yields for properties north of the midlands than in the south. Only two regions showed slight falls in yields, but in encouraging signs on a national scale, the proportion of tenancies in arrears fell.
North-east tops the chart
Yields in the north-east of England were at 5% in the year to November, with an average rent of £542. In the north-west yields were only slightly lower at 4.8% but with rents averaging out at £641. Yorkshire and Humber’s figures complete the trio of higher-performing northern regions with a yield of 4.4%, and average rent of £584.
The figures complement property price data such as the recent release from Savills, which predicted that homes in the north-west will rise by 3% in 2019 compared to 1.5% national. The cities of Manchester, Liverpool, Newcastle and Leeds both attract people moving into them for work and retain high numbers of graduates after the end of their university courses in the cities.
“Properties in the North appear to offer high percentage returns to property investors and, as a result, they are attracting interest even more,” said Martyn Alderton, National Lettings Director at Your Move.
“This strong appetite to buy has been accompanied by a rise in demand for rental properties, since the North is attracting many young professionals and families with its good transport links and job prospects.”
Rents in south-west are rising the fastest
Another region performing well is the south-west, driven by the cool attractions of living in Bristol. Rental prices in the region are an average of £701, having risen by 4.3% over the last 12 months – the highest rise in the Your Move survey. The next best region was the East Midlands, where rents rose by 1.9% over the same period, and overall the survey showed rents rising by 1.8% nationally.
Rents in London fell slightly to £1,263 and yields in the capital were the smallest in the survey at 3.2%.
With unemployment and interest rates remaining low, the financial outlook for tenants seems to be improving. The proportion of tenancies in arrears fell to 8.1% in November, compared to 8.6% in the previous month’s report.