Two sides to the lettings coin

Citation

(2000), "Two sides to the lettings coin", Property Management, Vol. 18 No. 2. https://doi.org/10.1108/pm.2000.11318bab.024

Two sides to the lettings coin

Rental yields are falling whilst capital values increase

Rental yields have fallen in certain parts of the country as a result of the growing number of properties in the lettings market and the much publicised increase in house prices, according to a report issued today by Bradford & Bingley Estate Agents (formerly Black Horse Agencies).

The report shows that letting a property could give you a maximum gross return of up to 10 per cent of its value. These returns are based on the annual rent received as a percentage of the value of the property.

Returns vary across the country by 4 per cent, with the highest return available from letting a flat in Scotland and the North West. The lowest return comes from letting a detached house in the North East and South West.

The survey also reveals that the national average time taken to let a property is four weeks - a week less than it was six months ago, although a fifth of all properties are still being let in a week or less and over half in under three weeks. The fastest moving regions are the South East, North East and the Midlands.

John Crossley, lettings director of Bradford & Bingley Estate Agents comments:

Although rental values have increased slightly, yields have fallen due to the rise in capital values.

The drop in time taken to let supports the fact that demand for rented accommodation remains strong in many areas and makes the rented sector an attractive medium to long term potential investment.