Scottish rents remain the same

According to Your Move's Scottish BTL index for January 2016

• Average rent remains at £548 pcm, an annual rise of 2.3%
• There were regional variations - annual rental growth in Edinburgh & Lothians up 6.4%, whilst East of Scotland fell by1.7%
• Rent arrears are falling, and are now at their lowest rate since July 2015

Read in full - Your Move's Scottish BTL index for January 2016

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South East rents surge

Rents in the south east have surged beyond the rate of inflation rising 5.4% over the last 6 months as rents surge following heavy demand from tenants from corporate tenants and families relocating from the over priced London market.

Corporate tenants made up 47pc of tenancies in Berkshire, Buckinghamshire, Hertfordshire, Kent, Surrey and Sussex in the second quarter of the year according to reports in the Telegraph.

This compares to the national change over the last 6 months of just 1.2% according to the Rentindex.

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Pre - election slump in rent ends

Residential rents have been on a downward slide leading up to the election according to the Rentindex - the UKs only real time barometer on UK buy-to-let rents.

The Rentindex shows that over the last 3 months rents which still exhibit a long-term upward trend, have slumped 3%. 

Rents though have very recently recovered by 0.7% over the last month perhaps reflecting landlords relief that rent controls were no longer on the post election menu.

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Rents average 33% of earnings

Despite all the 'noise' about booming rents, rent controls and a decade where house prices have surged and then busted following the financial crisis;  private sector rents as a proportion of average earnings have remained remarkably stable.

The proportion of earnings accounted for by private sector rents has fallen in the band between 31% and 37% since the 4th quarter of 2004 and has averaged 33%.

This means that landlords stand to gain from an improving economy where average earnings rise above the rate of inflation.

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Britain most expensive for flat shares

Britain has come out as being the most expensive country in Western Europe to share a flat.

The study of over 35,000 tenants in the  UK, France, Italy and Spain reported that UK tenants pay over £50 more per month than their European neighbours.

UK flatmates reportedly pay out an average of  £390 per month compared with Italy at only £297.

Rents are up..again!

Landlords have increased rents for the sixth consecutive month, hiking them by an average of 0.5 per cent in July.

The average UK rent is now £676 per calender month, which is 2.3 per cent higher than a year ago, data from the monthly buy-to-let index from LSL Property Services has shown.

LSL said that rents in July were just £12 shy of their peak two years ago. With the increase in rent, a landlord’s average yield stood at 4.9%.

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Buy-to-let total returns

Property services company LSL has claimed that as a result of the recent declines in house prices, the total return from investing in buy-to-let over the last year dropped slightly to 10.1 per cent in July.

The average landlord would have made a total return of £15,961 in the last year, £8,706 in capital gains and £7,255 in rental income.

An investor buying property now could expect a total annual return of 3.5 per cent, the equivalent of £5,838.

However, these figures are likely to underestimate the real return made by many landlords. This is because landlords frequently target higher yielding properties where the ratio of rent to capital value is higher than for the average property.

What has also been seen over the last 12 months is the exodus of many of the accidental landlords who decided to rent their property out rather than sell into a depressed and falling market. Many of these landlords are now attempting to sell their property; resulting in the disappearance of the glut of properties and thereby forcing rents higher.

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Reluctant Landlords Make You Want to Scream

The Association of Residential Letting Agents (Arla) has reported a fall in reported cases of 'reluctant landlords' by its members during the three months to the end of June.

The number of ARLA agents dealing with properties from home owners who were having to rent them out remained high at 80pc, but was well down from a peak of 95pc in November.

However, despite the fall, there are still a large amount of 'reluctant landlords' continuing to add to the saturation of supply of rental properties.

The hope is that as the property market recovers these 'reluctant landlords' will be able to sell unwanted property and exit the rental market, to help push rents up for remaining landlords.

" Please, anything, just don't make me be .........a landlord! Aaaaaagh"

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