What is the Real Truth Behind Rental Yield at the Moment?

The truth is that each point of view is correct, in its own way. Just a few short months ago newspapers were reporting rises in rents and warning that alongside the credit crunch this could have disastrous consequences for tenants who are currently short of cash. Yet a few months on and you can now also find reports of stagnate or falling rental values.
Many Landlords are struggling financially at the moment. Particularly hard hit are fairly new entrants to the buy to let market who hoped to make a quick fortune. Numerous novice buy to let investors who have flooded the property market in the last couple of years, are finding themselves in a negative equity.

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However, what most statistics don’t make obvious is the regional differences and differences in the types of properties being reported on.

A more in depth study of reports from findaproperty.com reveals that rent is indeed still on the rise in certain location, while rent is decreasing in others. It also reveals that the type of property you are renting out has something to do with whether you are experiencing good times or bad times in the current rental market.

Previously many investors felt confident that they could do general research and make general assumptions such as the North West is a good place for rental yield or parts of the south good for capital growth.

We are currently in a situation that these types of blanket assumptions are proving to be less accurate than they used to be. A study of paragon mortgages July buy to let index report reveals some interesting facts.

• Rental Yields remained stable at 6.4% in June, after hitting a two year high in May
• Regions achieving the highest yields in June were Wales (7.9%), the North (7.4%) and the North West (7.3%)
• Rental incomes remained steady in June, but are up 9.3% year-on-year.
• Regions achieving the highest rental incomes in June were London (£19,788), the South West (£15,954) and the South East (£12,128)

Closer scrutiny reveals that according to Paragon places like East Midlands and Greater London there is a negative %change/yr where as the North and Wales are flourishing in comparison.