Tenant demand is strongest in the south east and greater London, however landlords can achieve the best rental yields in Yorkshire and Humberside, Scotland, and the North East, data from the buy-to-let lender BM Solutions has revealed.
BM Solutions latest quarterly index, which questioned 1,079 National Landlords Association members, showed that the percentage of landlords who are optimistic over the outlook of the UK’s financial markets has increased from 28 per cent to 37 per cent in the last 12 months.
This increased optimism stems from increased tenant demand, with 42 per cent of landlords reporting stronger tenant demand in the last three months, compared to 37 per cent in the second quarter of this year.
The proportion of landlords who said demand had risen ‘significantly’ in the last quarter held steady at 10 per cent.
Tenant demand is reported as being particularly strong in the south east and greater London area where more than two in five perceive it to be rising; while increased demand is weakest in the North East.
However Yorkshire and Humber is the most profitable region commanding an average yield of 6.8 per cent compared with 5.3 per cent in central London and just 5 per cent in what BM Solutions calls ‘outer London.’
Furthermore, around 27 per cent of buy-to-let landlords are planning to increase their portfolio in the next 12 months, with 16 per cent intending to expand before the end of the year.
Phil Rickards, head of BM Solutions, said: “While the latest official figures showing a degree of uncertainty creeping into the outlook for the economy as a whole, the future looks optimistic for landlords as many are reporting increased tenant demand and more than a quarter are planning to expand their portfolios.
“There is further evidence of a north south split, with tenant demand greatest in the south east and London, whereas the greatest yields are to be found in Yorkshire and Humberside, Scotland, and the North East.”
emma.hughes@ft.com
