Rents up again

Released on: February 29, 2008, 6:04 am

Press Release Author: Jim watson

Industry: Real Estate

Press Release Summary: Amid all the recent negative publicity about buy-to-let, one
factor remains a constant theme: the rise in rental incomes for landlords.

Press Release Body: Amid all the recent negative publicity about buy-to-let, one
factor remains a constant theme: the rise in rental incomes for landlords.

The latest Paragon Mortgages buy-to-let index, covering trends in December 2007,
showed that during the month rental incomes were up by 2.5 per cent, which equates
to an annualised 19.4 per cent. In addition to this, the final quarter of the year
showed that an 8.1 per cent rise had taken place, while overall annual rental yields
were at 6.2 per cent, the highest since October 2006.

One factor, which has been frequently flagged up as a reason for rising rents in
buy-to-let, is an increasing level of demand. This is partly caused by an increase
in immigrant and student numbers but also by many would-be first-time buyers opting
to stay off the housing ladder for the time being, in the hope that affordability
and certainty about how the market is going would increase in the months ahead.

However, if affordability constraints are an element in helping raise rents, this
does not necessarily tally with yields, as regional differences in the Paragon
figures indicated. While the three highest average rental incomes per head are
London (20,949), the south-west (14,691) and the south-east (11,630), the highest
yields in December were in the north at 7.1 per cent, followed by the north-west and
Yorkshire and Humber regions (both seven per cent) where housing affordability is
better. This is an indication that for investors the various costs involved in their
operation mean that the headline figures for rents are not the whole story.

The fortunes of buy-to-let in the north have been the subject of major debate, since
a number of regional cities have a high concentration of apartments and flats built
in city centres in recent years. Some have argued that there is now an oversupply
and the market is flat, while others are confident that such properties are still
making for good investments.

Both views were represented this week in a report by the Bradford Telegraph and
Argus on the decision of JM Construction to abandon a project to transform an old
block of flats into new apartments. Managing director John Mulleady said the company
had pulled out because the flats market in Bradford city centre had \"died a death\".

Yet others in the city\'s property industry take a very different view. Mani Waheed,
managing director of Squarefoot Apartments, told the paper: \"Apartment prices in
Bradford city centre are not falling. The prices are steady and holding values. From
an investor point of view the Bradford rents are moving up, so rent payments are
covering mortgage payments.\"

Another to tell the paper things were in a sound position was Ashgar Ali of Smart
Moves, who commented: \"I would not say the market was buoyant, but it\'s still safe
money in the sense that there\'s lots of growth potential in Bradford.\"

For buy-to-let investors in these cities, growth potential may be the key. While the
generally strong performance of the UK economy in recent years has helped
regeneration in many places, the prospects for each and every city in the future may
not be the same.

One property developer, Allied London chief Michael Ingall, told the Manchester
Evening news that the city region was one area where huge expansion would take
place, with Manchester achieving its potential as a business city and the population
surging as a result. Claiming that the area was \"probably the only place in the
country\" with the requisite airport, infrastructure and brownfield sites to achieve
such a thing, he predicted the population could double in the next 30 years and
possibly even treble by 2050.

Whether such an expansion will occur remains to be seen, but if anything approaching
that sort of change takes place, there will certainly be nobody arguing that too
many new flats are being built.

In today\'s world Property investment is an excellent investment option especially
investment in UK

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Contact Details: Address:Assetz House, Newby Road, Stockport,Cheshire

zip:SK7 5DA

ph:0845 400 7000

fax:0845 400 6010

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