Smaller Buy To Let Properties Provide Best Yields

Smaller buy to let properties provide property investors and landlords

with the best rental yields, says Countrywide

Smaller Buy To Let Properties Provide The Best YieldsCountrywide’s latest research is based on 50,000 buy to let properties across England, Scotland and Wales, and their survey found that the average PRS rental yield for a one bedroom property was 6.8% during the first quarter of 2013.

This compares to

  • 6.4% for a two-bed property,
  • 6.2% for a three bed property  
  • 5.6% for properties with four or more bedrooms.

Countrywide found that the average private rental sector rent paid for each buy to let property type during the first three months of the year was up on the same period in 2012.

One bedroom apartments now attract an average PRS rent of £673 (GBP) compared to £758 (GBP) for two bedroom buy to let properties, both have increased by 3.3% in the last year.

All buy to let property types have also seen rent arrears fall in the last year, according to Countrywide, a view that is not shared by some homeless charities and even other national mortgage lenders and property industry specialists.

Nick Dunning, commercial director at Countrywide, said: “Our data shows one and two bedroom properties are providing greater yields than larger properties for landlords, 6.8% average yields for one bedroom properties, means there are some really good opportunities for investors with relatively low budgets. For example, a one bedroom flat in Nottingham recently sold for £51,000 and is providing a rental yield of 6.9%. With rents rising, arrears falling and some significantly improved buy to let mortgage products compared to those available in the last two years, the findings are very encouraging for investors who are looking to start or expand their property portfolio this year.”

Property investors are seeking the best returns that the current private rented sector can offer and buy to let investors are purchasing property with a long term view and becoming landlords, rather than waiting for capital appreciation to increase the overall value of the buy to let property.

These landlords are making the most of the products and services on offer to landlords, buy to let property investors and property lettings agents, includingcomprehensive Tenant Referencing and  Rent Guarantee Insurance to ensure a regular rental income from their buy to let investments.

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