Rental yields in England and Wales climb 0.7% in Q3

Rental yields across England and Wales saw a 0.7% rise in Q3 compared to Q2, according to new data from Fleet Mortgages.

Q3 saw total rental yields on residential buy-to-let (BTL) properties across England & Wales climbed to 6.3%.

Fleet also reported a slight fall in rental yields across the UK compared to last year, but highlighted that in 2020 this covered the first full three-month period out of lockdown where yields spiked in certain parts of the country.

The BTL specialist lender’s latest data compared Q3 2021 and Q3 2020 and covers all the areas in which it lends in England and Wales, highlighting the rental yield changes that have occurred in each region.
Seven out of 10 regions, all except East Anglia, South West and South East – which has the same rental yield figure as Q2 – have seen an increase on the Q2 2021 figures. Fleet suggested that its data shows that rental yields in many of the regions of the UK improving throughout 2021 and that there are only minor yearly drops across most of the regions analysed.

Fleet chief commercial officer, Steve Cox, commented: “When you compare the two most recent quarters in 2021 we can see a steady improvement in yields throughout the year, driven by incredibly strong tenant demand, and other UK housing market fundamentals such as a lack of supply for both tenants and owner-occupiers.

“Supply remains the real driving force here and it’s simple economics to point out that with tenant demand as it is, and given the supply of PRS properties, yield performance benefits greatly.”

“We continue to see excellent performance levels for rental yield across the North of England, and it’s unsurprising that landlords are looking at their options here. However, a little further south and we are also seeing better performing properties in the Midlands and in Wales.

Cox suggested the PRS and the BTL market “continues to retain its allure for landlords”, with many having used the stamp duty holiday to add to portfolios.

He added: “This is aided by the strength of finance options available to landlords at present and the array of competitively-priced mortgages whatever their needs and circumstances. The UK is not going to change its love affair with property anytime soon and this bodes extremely well for advisers and their clients.”

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