English and Welsh BTL rental yields were up in the third quarter, with Fleet Mortgages reporting a 0.3% increase from last year.
The overall average rental yield for BTL properties in England and Wales in the third quarter was 7.5% with increases registered or levels maintained in all but two regions.
The highest increase was registered in Wales where the country’s average BTL rental yield had increased by 1% to 8.2%.
Substantial increases were also seen in South West and East Anglia, with growth of 0.9% and 0.7% respectively.
In contrast, the North East — which has the highest regional rental yield of 9% — had seen the biggest decrease of -0.7%. The other reduction was seen in the West Midlands, with a slip of -0.1% to 7.5%.
No change in yield was registered in Greater London which maintained at 5.9%.
However, the picture was different on the basis of average monthly rents. Average monthly rents across Fleet’s lending areas rose by 3.2% in Q3, with Greater London (£2,165), the South East (£1,662) and the West Midlands (£1,563) recording the highest levels.
Annual rent growth stood at 10.4%, driven by double-digit increases in the West Midlands (21.2%), North East (20.8%) and Yorkshire & Humberside (19.2%), following closely behind.
“Our latest Rental Barometer reinforces just how resilient and adaptable the private rental sector, and specifically landlord activity within it, has become,” said Steve Cox, CCO Fleet Mortgages (pictured above).
“Yields across England and Wales edged up for the second quarter in a row, driven by sustained tenant demand and a market that, while challenging, continues to offer opportunities for well-structured and well-capitalised landlords.
“The message from our data is clear: BTL remains a viable and attractive proposition for professional landlords who are prepared to adapt, and for advisers who want to support their clients in building sustainable portfolios.”
