While rents rose every month through the spring and summer of this year, August saw a very slight fall which in real terms was an overall drop of just £1 and can simply be put down to a slight correction according to Adrian Gill, director of Reeds Rains. With no major changes to the fundamentals of supply and demand, it is likely that rents will continue to rise in the longer term until the drastic shortage of homes is addressed.
However, looking at the different regions, there is a notable difference between London and the South East, where rent rises slowed, and in the Midlands and East of England explains Adrian Gill, “Every piece of evidence is pointing to a rapid take-off in the East of England, where both rents and purchase prices have been especially strong for some time, and both East and West Midlands appear to be sharing in this.”
Gross yields remain steady, at 5.1% - the same as July and up from 5% in August 2014 with total annual returns for the year to August 2015 averaging £8,323 capital gains and £8,533 rental income, suggesting a gain of £16,856, albeit before costs and tax.
It’s all change in Wales now with private landlords needing to register themselves and their properties with the Welsh authorities to be able to legally let properties, whether you are living there or not. And if you intend to manage and maintain your properties yourself, you will have to pay £250 and take a training course to be compliant. If however we manage your properties for you, although you have to still be licensed, as all Reeds Rains offices are members of ARLA, we are already compliant with the regulatory requirements to let and manage properties on your behalf.
From a rental income perspective, the statistics show that rents are falling slightly in the region by 3.1% year on year. This is possibly though due to landlords buying smaller, more affordable homes which can give a better return and also unlike England, fewer premium properties are rented, reducing premium rent uplift seen in other parts of the UK.
If you are keen to input into the future of the Private Rented Sector in Northern Ireland, there is a conference running which will cover improving standards, increasing supply and promoting professionalism in the area, so it may be useful to attend. For more information about the ‘Private Rented Sector Conference 2015: Fit for the future? you can book your place at the Housing Rights website http://www.housingrights.org.uk/event/private-rented-sector-conference-2015-fit-future). But don’t worry if you can’t make it as we will be there and will report back on the day’s events in future newsletters.
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