Research from Precise Mortgages has revealed that average rental yields for HMOs were the highest across all types of property at 7.1%, 1.3 percentage points higher than the market average.
Yields for MUFBs were the second highest at 6%, which highlighted the opportunities for landlords to refocus their portfolios.
Across all property sectors, average yields dropped slightly in Q1 2018 to 5.8% from the 5.9% reported in Q4 2017, and were now at the same level as Q1 2017.
The highest average yields of 6.7% were achieved on portfolios of between 11 and 19 properties.
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With regards to regions, landlords with portfolios in the North West reported the highest rental yields at 6.7%, while central London portfolios recorded the lowest average yields at 4.8%.
“As HMOs attract multiple tenancies, gross rental income tends to outstrip single lets and rental income is more secure even if one tenant leaves a void,” said Alan Cleary, managing director at Precise Mortgages (pictured above).
“Experienced landlords are looking to rebalance their portfolios and there is a real opportunity for brokers to support them to work with specialist lenders who are prepared to be flexible and have expertise across the widest product set.”
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