Are Landlords yields dropping

yield decline
Jan 25 2019

Are Landlords yields dropping

Are all the legislation changes finally impacting on the yield a landlord can expect from a buy to let property investment? Through giving presentations at various Property meets, it does seem that many one property landlords are noticing quite a reduction in yields, whereas those with several properties seem to be maintaining yields but lower profits, not sure how?

I have heard landlords stating yields as low as 3-5%, however how does this compare with other forms of investment? I know from looking at my own bank, savings are not at that level yet.

I have noticed a dramatic increase in landlords instructing us to remove a tenant to allow them to sell their property. Many initially tried to sell their buy to let properties with sitting tenants, but landlords made such low offers, they decided to evict the tenant and sell to potential home buyers.

You can understand with all that is going on landlords offering low bids on properties, they have their return on investment to consider.

I would say now almost have our instructions are from landlords who want to invest in other types of investment, all citing the tax and legislation changes as reasons for the exit from the industry.

However, it is not all doom and gloom, I have spoken to several landlords who although admit the yields are not as good, still believe it is the best form of investment. With several of them looking at commercial properties.

What are your thoughts are yields dropping to the point where alternative investments are looking favourable?

Whichever route landlords are taking, there is a consensus of a lack of confidence in the current and future markets, what with the political unrest and no clear direction with Brexit.

When you consider several other industries are only reporting growth of between two and four percent, maybe property investment is worth sticking with for the time being.

Maybe the changes in the buy to let industry are just natures way of sorting out the heard, the strong efficient landlords will continue and the fly by night landlords will become a thing of the past?

My thoughts, there will be demand for rental properties for a long long time to come, it is down to landlords to be efficient in the renting of their properties. Unless of course a change in direction by any government, that introduces such severe legislation that makes buy to let properties a thing of the past. Should this happen then tenant evictions will rise along with homelessness.

What are your predictions for the next 12-18 months?

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