property capital gains
A 4.8% growth in the average monthly rent led buy to let investors across the UK to achieve a rental yield of 6.1% in 2011, according to new figures from BM Solutions.
There seems to be a very healthy demand for rental properties across the UK right now, which in part may be driven by the costs associated with buying a home: costs which, for some, will only increase as the stamp duty holiday comes to an end. Average gross yields on a buy to let property have been just over six per cent for the past two years, driven by growth in rental values.
However, with house prices likely to remain broadly flat again this year, buy to let landlords can again expect little capital gain on their investment in 2012.
Regional rental prices show significant variation
While the national average monthly rent increased by 4.8% overall, there are more significant gains in regional areas. The largest increases were in East Anglia (8.0%) and the North (6.9%). The South East and Greater London recorded rises of 5.8% and 5.6% respectively. In contrast, rents increased by less than 1% in Wales (0.1%) and Scotland (0.7%).
Average rents in London are more than twice the national average
The average rent in Greater London remains significantly higher than elsewhere in the UK, at £1,212 per month. The average monthly rent in the capital is 69% higher than UK average of £716 and 41% above that in the South East (£858) – the next highest region. The lowest average rents are in Wales (£474 per month), the North and Yorkshire and the Humber (both £488 per month).
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