Majority of landlords losing confidence in rental profits

Majority of landlords losing confidence in rental profits
This perception probably exists because many will now be feeling the impact on their businesses of greater taxation

According to recent figures from the National Landlords Association, the proportion of landlords who are optimistic about their ability to rely on a steady rental yield has fallen 15% in the past two years – down from 64% in Q2 2015 to just 49% in Q2 2017.

The drop-off in confidence coincides with the period since the announcement from the then Chancellor George Osborne in July 2015 that mortgage interest relief would be removed for landlords.

However, the sentiment contrasts with actual rental yields achieved across the UK, which have remained fairly stable. Over the past few years, the average yield has fluctuated around the 6 per cent mark.

Regionally, landlords in the East Midlands currently generate the highest rental yields at 6.9 per cent. By contrast, landlords in outer London generate the lowest yields at 5 per cent. A full regional breakdown can be found below.

The news comes during a time when property prices in many areas of the United Kingdom are stalling. The average price of a home rose in July by 0.3 per cent following recent declines in May, April, and March.


Richard Lambert, Chief Executive Officer at the NLA, said: “Average rental yields have remained fairly stable over the past few years, yet there is a steady increase in landlords losing confidence in their ability to make a profit from letting property.

This perception probably exists because many will now be feeling the impact on their businesses of greater taxation and the costs of complying with regulation, which are eating away at their profits and making it harder to provide homes. Like any business, the increasing value of the capital assets on your balance sheet will be of little help if you are treading the fine line between profit and loss, especially if you can’t keep up your mortgage payments in the short term”.

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

It depends on the people, some older adults decide to make a long-distance move in order to live closer to their children or settle in a place with a lower cost of living.

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brandonlee10
brandonlee10 24 Jul 2017

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IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

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IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

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cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

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Jo Mullett
Jo Mullett 07 Jul 2017

Here in Swansea, known as the Japanese knotweed capital of the UK, it never fails to amazes me that people have no idea of the potential problems this invasive non-native plant can cause when buying or...

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NathanG
NathanG 05 Jul 2017

McDonalds, for example, have been purchasing their real estate on prime locations for years. If something happens to the company they'll have invaluable assets that will be able to save them. We might

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Jonah
Jonah 04 Jul 2017

Graham: surprised to see you cite the "extra tax liability" as capping out at ?560. It doesn't - the extra tax is exponential, as it is levied on the income (i.e the inflating level of rental income you...

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Dianne Griffen
Dianne Griffen 29 Jun 2017

Be very wary of anyone bringing you deals that they have ?found? and want to ?sell on to you? or ?joint venture? with you on ? you need a proper legal contract for this, involve a RICs surveyor to confirm...

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jason hadzikostas
jason hadzikostas 28 Jun 2017

The most important thing is a budget. Students have to manage their spendings in food, house maintenance, books and many other things. According to me, student Studios are the perfect option for them as...

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