Fleet Mortgages reveals 'slight softening' in rental yields across England
Steve Cox

Fleet Mortgages reveals 'slight softening' in rental yields across England




The BTL specialist lender Fleet Mortgages has launched the second iteration of its BTL rental barometer covering Q2 yields across England.

The regional snapshot covers the areas Fleet lends in and highlights the rental yield changes that have occurred for each region.

The yearly comparison is between Q2 2019 and Q2 2020.

Fleet

Overall, it shows rental yields across England on residential BTL properties at 5.3%, a 0.3 percentage point easing down from 5.6% achieved in Q2 of last year.

The North West region posted the top rental yield for the quarter, a 0.6 percentage point increase year-on-year to 7.6%.

The first iteration of it’s BTL rental barometer, covering Q4 2019 compared to Q4 2018, showed that only the North West had a drop in rental yield over that period.
In this period, however, there have been over one-percentage-point falls in the North, Yorkshire & Humberside, and East Midlands, with smaller falls in the South West, East Anglia and Greater London.

There were slight rises in the North West, West Midlands and the South East.

The Q2 figures do not include Wales, as different lockdown rules applied and no meaningful data was available to provide a robust rental yield figure. 

Steve Cox, distribution director at Fleet Mortgages (pictured above), commented: “While we are very early into the post-lockdown ‘new normal’, the latest iteration of our quarterly research appears to show a more promising picture for rental yield, than some might have predicted, with what we might describe as only a slight softening compared to the previous year.

“The economic backdrop may appear somewhat bleak at present, but this might change quickly depending on the type of recovery we get, and certainly at the moment our latest figures do not suggest sharp falls in rental yield. 

“This may well be as a result of pent-up demand and more households being formed as a result of the lockdown, but it’s clear that more data will be required and it will be interesting to see whether this trend will be maintained into the rest of the year.

“Clearly, we will need to take into account the tailing-off of the furlough scheme and how this impacts on the level of unemployment in the country, the ability of existing tenants to keep paying their rent, and the re-introduction of evictions and repossessions at the end of the year, to get a clearer picture of where rents and yields are heading.

“At Fleet, we are certainly seeing growing levels of interest from professional landlords adding to portfolios and that borrower demographic appears even more committed to property investment, which is good news for advisers active in this space.”

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