Buy-to-let property returns climb by 10% in 12 months

by Gary Whittaker

Landlords across the UK have seen the returns they can achieve from their buy-to-let investments increase markedly over the course of the last 12 months, according to the latest report from the Property Partner.

It said that in the space of the year to the end March 2016, total returns for buy-to-let properties in England and Wales have increased by 9.57 per cent. This comes on the back of a great start to this year, in which returns have climbed by 2.3 per cent between January and March.

According to Rob Weaver, Property Partner’s director of investment, returns have been positively affected by demand and the fact that more landlords were rushing to purchase homes in the months before the Stamp Duty levy came into effect at the start of April. 

He said that these factors have meant very strong readings for landlords in certain areas of the country, with both London and expanding regional cities now showing good returns for landlords. 

"This was especially true of London, where annual returns were in double digits, reaching an eye-watering 16.5 per cent. The East was strong too, and from first hand experience the Northern Powerhouse regeneration plan is boosting investment activity in the North West and in particular Manchester," he said. 

And when asked about how the market will look in the future, Mr Weaver said that there will be short-term instability brought about by the risk of a Brexit vote in June. The chance that the UK may leave the EU will leave many people feeling concerned about how this would affect their portfolios, which could mean a cooling in investment levels for at least a short time. However, there are enough positives in the UK economy and the PRS to make sure this is not too devastating, he added. 

"The fundamentals of high employment, wage growth, cheap borrowing and the chronic shortage of supply remain in place and are positive," he concluded. 

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