According to a buy-to-let index produced by Reeds Rains and Your Move estate agents, rental income has increased at the highest rate since 2014.
In January this year, the average yearly rental income equated to 12% of the investment made into buy-to-let, or £21,988. This amount consists of the capital gain and the rental income. The figures are the best since November 2014.
The director of Reeds Rains and Your Move, Adrian Gill, stated that the housing shortage is resulting in property prices rising and buy-to-let investments providing a healthy return. He added:
“Landlords’ balance sheets are looking healthier than at any point since 2014, and property investors are looking at an excellent rate of return from their portfolios.”
According to the monthly index, the average rents increased in January 2016 by 3.6% to £790 a month. The annual increase during December 2015 was 3.4%. The East Midlands has seen the largest increase in rents, with an increase of 5.9% to the average rental income.
Property prices are also rising, with the Office for National Statistics reporting that the average property price reached £288,000, an increase of 6.7% to December last year.
As house prices and rents continue to increase, more people will face problems finding an affordable home. Mortgage advisers study for their CeMAP qualification so they can help borrowers to find an affordable home where possible. The changes to Stamp Duty tax and tax relief on buy-to-let mortgages may cause problems for landlords from April this year, which may have an impact on the property market.
