Buy to let yields continue to fall
In a sign of strength in the UK property market it has been revealed that the average buy to let property now commands a rent of 4.75% as of January 2010 compared to a peak of 5.1% in March 2009. Despite the fact that UK property prices have risen over the last few months, many landlords have found it difficult to push through rent increases and indeed an increase in the number of rental properties has put pressure on rental income.
While it is perhaps too soon to start and sound the alarm bells, the fact that real rental income is falling at a time when property prices are increasing is a concern. Landlords throughout the UK need to appreciate that to avoid the problems of the past there needs to be some form of balance between rental income and the capital appreciation expected from properties. It will be interesting to see how actual rent and rent yields perform in the short to medium term because the more expensive house prices become the more difficult it will be for new entrants to the buy to let market to cover their mortgage payments out of rental income.
Many buy to let investors suffered a collapse in their portfolios as the credit crunch and the economic downturn hit home. Hopefully it will be a case of "once bitten, twice shy" and buy to let investors will not fall into the same traps again!
Share this..
Related stories
Banks accused of scare tactics over charges
The UK's banks have been accused of trying to 'frighten' their customers into abandoning attempts to reclaim money they paid in unauthorised overdraft charges.Consumer group Which? is urging people to continue reclaiming their bank charges despite a county court ruling earlier this month which rejected the attempt of a Lloyds TSB customer to recoup £2,545 he had paid the bank for exceeding his ov...
Read MoreHas Gordon Brown Opened The Flood Gates For Wage Rises?
In a move which will eliminate the threat of possible industrial action by UK nurses in the short term , it has been announced that they have agreed an 8.1% three year wage deal. The nurses will receive a rise of 2.75% in year one with a 2.5% rise in each of the following two years. However, buried away in the small print is the opportunity for the Unions to reopen talks if the price of living c...
Read MoreWho will look after you when you get older?
The subject of pensions and savings is something which has been in the headlines for some time now and subjects which many people are becoming increasing concerned about. The ever-raising cost of living in the UK is far and away outpacing investment returns and interest on savings thereby pushing more and more people towards financial uncertainty in their later years. Even though the UK state p...
Read MoreChildcare costs spiral for families
29/12/2014 Research from insurance giant Aviva shows that one in ten UK families see one parents wages go entirely toward childcare and commuting costs. About 43% of people use childcare to enable them to go back to work, but the report concluded that juggling the costs of childcare is proving frustrating for parents. Business leaders have now called for the government to take action to c...
Read MoreBank of England sees recovery towards the end of 2009
In a move which will surprise many observers ahead of the budget on Wednesday it has been revealed that the Bank of England expect the UK economy to recover towards the end of 2009 and move into positive territory in 2010. Despite the fact that today we saw inflation turn negative for the first time in 50 years it seems as though the UK recession may be coming to an end and consumers may be growin...
Read More