Location will be a key issue for UK landlords in 2013

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Location will be a key issue for UK landlords in 2013

Location is one of the key issues facing prospective landlords in the UK when deciding to purchase a new buy to let property in 2013. While the condition of the building, its price and the number of bedrooms will be major considerations it is the location that will eventually determine whether prospective tenants will want to rent it and how much they are prepared to pay.

A recent Association of Residential Lettings Agent (ARLA) report suggests that rental returns in the North East and North West have been rising steadily since the end of 2011. Throughout the last few months they hit 5.7% and 6% respectively, making the North West the region with highest rental return in the UK.

‘One of the biggest issues within the UK rental market today is that rising rents in many locations have put significant pressure on tenants. The cost of renting continues to rise month on month, in some places at nearly twice the speed of the average salary increase, with many tenants needing to dedicate a growing portion of their disposable income to cover the cost of accommodation,’ said James Davis, chief executive officer of Upad, a leading UK online lettings agent.

With this in mind, landlords looking to expand their portfolios in 2013 might be interested to learn that it is the North of England rather than the South which is currently providing the highest yields. Independent research commissioned by specialist buy to let mortgage lender Paragon revealed that the North West is the region in which landlords will enjoy the greatest yields.

Quote from PropertyCommunity.com : “The UK private rented sector has grown by 47.9% since 2007, according to the latest market report from Jones Lang LaSalle.”

Typical yields of 6.6% were recorded in this area in the first quarter of 2012, up from 5.9% in the fourth quarter of 2011. It is a similar story amongst other northern regions, with the North East recording an average yield of 6.5%. The North’s undoubted success however does not necessarily mean that there is nothing to be gained from investing in southern buy to lets.

Eastern England registered healthy 6.3% yields, the South East 6.1% and London 5.9% and indeed, London was recently picked out by experts as a location in which the rental market is currently performing particularly well. Jon Neale, head of residential research at Jones Lang LaSalle, said the capital is currently the perfect destination for landlords, suggesting the lack of housing in the city would make it easier to rent homes to tenants.

As one of the UKs largest and fastest growing letting agencies, Upad specialise in helping professional tenants rent properties from landlords directly by allowing landlords to manage their own viewings. In the last year alone, 107,000 tenants asked Upad for help finding a home.

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One Response to “Location will be a key issue for UK landlords in 2013”

  1. Would it not be fair to say also that investing in properties in micro markets such as certain commuter belts could be beneficial as there is an estimated 19-21% increase in prices over the next 5 years

    Reply

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