Saturday, May 15, 2021
Real EstateUK

Rental yields rise across England and Wales

Rental-yields

The North East of England posted the top rental yield regional figure for the third quarter running at 9.1%, followed by Yorkshire & Humberside in second spot at 8.2%, and the North West at 7.8%

Fleet Mortgages’ latest Buy-to-Let Rental Barometer, covering Q1 2021 rental yields across England and Wales, shows rental yields on residential buy-to-let (BTL) properties of 6.3% across England, exactly the same figure achieved in Q1 2020.

This is 0.6% up on the rental yield figure for the last three-month period covering Q4 2020.

While every single region covered in the Barometer does show a drop on the year-on-year (YOY) figures, Fleet has noted that Q1 2020 was the last three-month period pre-pandemic, and that the quarterly comparisons between this quarter and the last of 2020 are much more positive.

Between Q4 2020 and Q1 2021 only one region, East Midlands, showed a quarterly drop in rental yield from 6.9% to 6.7%, and Greater London recorded the same quarterly figure of 5%.

All other English regions showed an increase in yield, with Yorkshire & Humberside up 2.5%, the North East and North West up 1.2%, the South West up 0.5%, East Anglia up 0.3%, and the West Midlands up 0.1%. There was no data collected for Wales in Q4 2020.

The North East of England posted the top rental yield regional figure for the third quarter running, this time hitting 9.1%, with Yorkshire & Humberside in second spot at 8.2%, and the North West with 7.8%.

Fleet said the overall data showed an increasingly strong picture with quarterly rental yield increases in most regions outstripping the last three-month period, and quarterly drops where present being small.

The lender said there was a rising demand from tenants in many regions of England and Wales, which was not being met by supply, and was resulting in a rise in rents and therefore yields. Fleet said this was likely to continue as the country moved out of lockdown with tenants increasingly seeking to move to new properties, often in areas outside where they currently live.

Steve Cox, chief commercial officer at Fleet Mortgages, said: In many ways, the yearly comparison we make within the Rental Barometer is something of a red herring, because – in this iteration – we are comparing the first quarter of 2021 with last year, which for the most part was pre-pandemic.

With that being the case, it’s not surprising that we see a yearly drop in every region, particularly in Wales, since this is an outlier as this is the first time in a year we’ve been able to present meaningful data. We fully anticipate that, in future iterations, yields in Wales will improve, Cox said.

He said: However, the far more pertinent comparison is a quarterly one, and shows the improving strength of the private rental sector for landlords, the impact an increase in demand is having in many regions, with the anticipation that this will continue through the rest of the year.

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