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Buy-to-Let Returns Outstrip Other Investment Options

May 11, 2016 | Landlord News  

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According to data from the latest Property Partner residential market index, buy-to-let landlords in England and Wales made average returns of 9.57% on their properties in the year to the end of March, mostly as a result of rising house prices rather than rents.

By contrast, the FTSE 100 index of shares fell by 3.9% over the same period, while savings accounts produced returns of just 1.4%.

The figures represent total returns based on a cash investor with no mortgage to repay, and before tax. However, it is claimed that the index takes into account the main costs of managing a property, letting fees, and voids.

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Although investors are exercising caution in the run-up to the EU referendum next month, the long-term outlook remains positive, according to the combined data from six industry bodies, investment companies, and letting agents.

The figures, compiled by Buy2Let, were used to produce a rental yield forecast for 2020. The North of England is predicted to do especially well, with Leeds, Liverpool, Manchester, and York expected to see the biggest rental yield growth over the next four years.

The cumulative rental yield growth in West Yorkshire is predicted to be an average of 19.91%, second only to North Yorkshire (21.42%).

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