31st Mar, 2016
The first rise in rents in England and Wales since autumn last year.
Against all the odds, it seems now is a good time to be a landlord. In spite of the extra 3% stamp duty on additional property purchases, announced in the latest Budget, positive performance of private rented property in the early part of 2016 bodes well for the sector.
The stamp duty increase means that anyone owning a second property that isn't their main residence and buying another, or replacing the one they don't live in, is likely to be affected. If you already own a portfolio of buy-to-let properties, or have a second home, but plan to buy yourself a new home to live in and sell your old one then you will not have to pay the extra stamp duty.
Even with these changes on the horizon, the monthly increase in rents was 0.1% between January and February, as detailed in the newest report from Your Move and Reeds Rains. For the first time since autumn 2015 there was a month-on-month increase, evidence of the market being in tip top condition in the early part of this year.
Across England and Wales, the average price of rent is currently £791 per calendar month. This is great news for buy-to-let investors, whose rental income has grown by up to 3.3% over the last year, which equates to (on average) an additional £25 per tenant, per month in rent.
In the January to February period, monthly rents in Yorkshire & the Humber hit an all time high, averaging £559. Of the five out of ten regions experiencing month-on-month rental price increases, the rate of growth was fastest in the East Midlands.
So what’s the overall benefit to existing landlords? Gross annual returns have reached 12.7% or £23,227 in absolute terms, a 17 month high.
Adrian Gill, director of Your Move and Reeds Rains said, “Spring is here for the rental market. Rents are rising and demand is growing. For those who already own properties, or have the capital to invest, there are opportunities to be found.”
Image source: www.pixabay.com
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