Buy-to-let investors have found rental income rising at its fastest pace since May 2013, but tenant arrears have also increased, figures have found..
According to the latest BTL Index from Your Move, average monthly rents increased 3.1 year-on-year across England and Wales to stand at £766 in February 2015.
The data found that the east of England was the top performer, with a 10.2 per cent yearly rise.
Total yearly returns on an average rental property were 11.5 per cent over 12 months to February 2015 – bucking the trend of slowly sinking returns over the previous six months.
However, gross rental yields on a typical rental property at 5 per cent for February 2015 were down 0.2 per cent on a year earlier, while tenant arrears at 7.8 per cent from 6.9 per cent in February 2014.
Rents have cooled in four UK regions. There were month-on-month rent decreases in Yorkshire, the North West, the West Midlands and the South East of England, all of which regions saw a 0.4 per cent dip from January to February. The index also revealed that the gross rental yield on a typical rental property in England and Wales stood at 5 per cent at February 2015.
Adviser view
Greg Heath, managing director for Lancashire-based Derbyshire Booth, said: “It is hardly surprising that things have stabilised. Let’s face it, unless housebuilding rises very quickly, it seems rents will continue to increase, which of course is good for buy-to-let investors.”
