UK rental yields have seen a marginal increase in the past year despite the volatile nature of the housing market, research from property investment platform Sourced Franchise reveals.
The company analysed UK house prices, rent values and yields in June 2022 and June 2023 to see how the economic environment has impacted buy-to-let investment returns.
It says while the UK is enduring a difficult period with rising mortgage rates, lower house prices and rising rent values provide an opportunity for proactive investors.
The latest data shows that the current average yield in the UK is 5.2% – a 0.4% increase since this time last year.
The strongest yields, which indicate the best places to invest right now, are currently available in Scotland (5.9%).
Other regional hotspots include Northern Ireland (5.7%), the North West (5.5%), Yorkshire & Humber (4.9%), and London (4.7%).
Scotland also leads the way in terms of annual yield increases, rising by 0.64%.
With 0.49% growth, London is also performing well, as are Wales (0.35%), the West Midlands (0.34%), North West (0.34%), and Yorkshire & Humber (0.34%).
The South East is the only region to have recorded negative numbers, with the current yield of 4% marking an annual drop of -0.02%.
According to data commissioned by the BBC, competition among renters is so fierce that there are now 20 requests to view each available property.
The average number of requests to see each home has more than tripled from six in 2019, the figures from property portal Rightmove show.
Sourced franchise director Chris Kirkwood says: “Economic turmoil can present great opportunities for investors who are willing to take calculated risks, and the UK’s current environment is the perfect example.
“Yes, the economy is struggling and rising mortgage rates are causing widespread concern on the housing market, but with house prices likely to fall further before they climb again, and rent values climbing at pace, buy-to-let landlords who can afford to take on current mortgage deals would be wise to pounce when the right properties come to market in the right locations.”
He adds that it’s ‘moments like this that see great investors zig while everyone else zags, and therein lies the genius’.
