An index tracking the performance of rental blocks across the UK has revealed some interesting data. It is contained within a wider report that examines more broad trends in the private rented sector. It shows that one sixth of the UK population currently lives in private rented accommodation.
The index section of the report tracked the rental performance of six cities: London, Leeds, Manchester, Glasgow, Bristol and Birmingham. Leeds and Manchester were found to have the highest initial gross yields in Q4 of 2013, at 8.2%. The average yield across all six city markets was 6.6%.
In the ten years from 2001 to 2011/12, the proportion of households renting privately in Yorkshire and the Humber more than quadrupled. With slightly over 15% of households in the private rented sector, Yorkshire and the Humber is now second only to London. In 2001, only the East Midlands had a lower proportion.
Investors looking to capitalize on the favourable market conditions are beginning to look beyond London, to areas such as Leeds, where yields are higher. In key urban centres, it is predicted that tenant demand will continue to grow.
It may not have involved Molotov cocktails and an overthrown dictator, but the transformation of the private rented sector over the last decade has been revolutionary in its own, quiet way.
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