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Rental yields hit three-year high

Written by: Christina Hoghton
The average rental yield achieved across the UK in the second quarter of 2018 was 6.2% – the highest level seen since the end of 2014, said BM Solutions, in its quarterly report produced with BDRC.

Landlords in Wales are generating the highest rental yields of 6.9%, followed closely by the East of England at 6.7%.

Yields are lowest in the North East (5.7%) and the South East (5.8%).

Overall confidence from landlords in their own lettings is at its highest level for 18 months and 8% up on a year ago, said the lender.

Tenant demand variable

Perceptions of tenant demand vary significantly across the country, with landlords in the East and West Midlands most likely to have experienced an increase in demand over the last three months (42% and 33% respectively).

However, in Scotland there has been a 15% fall in perceived tenant demand by landlords, and those in London and the North East are similarly lacking in confidence over demand.

Phil Rickards, head of BM Solutions, said: “It is encouraging to see that confidence across all of the key indicators has either increased or stayed the same on a 12 monthly basis and is particularly strong when landlords are considering their own lettings business.

“It’s a promising sign for landlords that rental yields are on the increase and are recovering some of the ground they have lost in recent years.”

Average rental yields per region 

Property location %
Wales  6.9
East Midlands  6.7
East of England 6.4
Scotland 6.4
North West 6.2
West Midlands 6.2
Yorks & Humber 6.2
London (Central) 6.2
South West 6.0
London (Outer) 5.9
South East (excl London) 5.8
North East 5.7

Source: BDRC Landlords Panel

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