Property investment performance continues to outpace wage growth and inflation

Property investment performance continues to outpace wage growth and inflation

Recent research from Hamptons, the leading estate agents, has revealed that despite the negative effects of government policy on the buy-to-let sector, it is still growing apace. The research shows that there are approximately 4.7 million households renting today and this is predicted to rise to 6 million by 2025. Here are some of the key findings from the research:

  • Average rental yields in some parts of the country are as high as 7.9% with the north west featuring well. Average yields in London are around the 5.4% mark.
  • Many investors are focusing on total return rather than just high yields with a shift of emphasis on properties with the potential to deliver high capital growth.
  • Average gross returns made by investors selling in 2017 was 69% (made up from 60% rental income and 40% capital growth).
  • Properties in the Midlands and Northern England have been delivering the highest rental yields with cities such as Birmingham, Manchester, Leeds and Newcastle faring particularly well.
  • More landlords are buying with cash with a staggering £21 billion invested in buy-to-let property through cash purchases in 2017 (two-thirds of all investor purchases).
  • Property investment performance continues to outpace wage growth and inflation, making it still an attractive proposition for investors.

In summary, the trends identified in the research show that there is an increasing demand from tenants for rental property, landlords are enjoying higher rents and this is compensating for mortgage interest tax relief changes, and investors are looking for properties that deliver a good mix of rental returns and capital gains. It would appear that buy-to-let is still alive and kicking!