Rents Increasing in the UK

A survey by the Royal Institute of Chartered Surveyors in the UK has shown that while rents had fallen in 2002 and 2003 they risen since. Rental rates have increased in London by about 12% over the last year.

According to RICS, the number of landlords selling their properties at the end of the lease has edged up for the second quarter to 6 per cent.

“This is to be expected as interest rate rises bear down on some more novice landlords at the margins,” the survey said. “Those who have a comfortable equity cushion may be riding out the rate increases and will be largely compensated by firmly rising rents.”

However, yields have continued to fall over the last year as house price inflation exceeded rental growth – making life even harder for new landlords. Purchasers have faced 5 interest rate rises over the past year eroding that traditional 10% yields seen by UK investors.

Whilst Buy-To-Let investors are still buying, net yields are substantially lower than a year ago. Those who can put down a 30% deposit are not being as hard hit by the rate rises.

Investors are increasing rents to cover the rate rises but finding hard to let properties in some areas.