Buy-To-Let

 - Rental Returns And Capital Appreciation Steady Say Letting Agents

The latest Buy to Let survey of members of the Association of Residential Letting Agents, ARLA, shows marginally higher rental returns are to be gained away from London and the South East despite much lower capital values.

The average value of Buy to let property in the South East is now £168,800 compared to £92,000 for all other regions. In the last six months there has been an increase of 8.4% in the average value of Buy to Let properties nationally. Values of investment properties in the South East have risen by 8.1% in the first half of the year. In the rest of the UK, Buy to Let investments have risen by 9.1%.

Compared to six months ago, there has been little change in average rental return. These have fallen from 7.6% to 7.3%. This is reflected in the averages for both the South East and the rest of the country. However, the highest averages are reported away from the South East. Nearly 10% of ARLA member letting agents outside the South East reported returns of between 11% and 15%.

The average empty period for Buy to Let properties tends to be quite short. Nearly half of the respondents reported the average empty period to be under a month. Over a third reported the average as a month and 13.9% reported average empty periods as two months.

There is a substantial difference between the average empty period in the South East and the rest of the country. Averages reported for the South East are 24 days against 33 days for the rest of the country. However the average period in the South East has risen from 21 to 24 days. Elsewhere, it is unchanged.

The survey showed the division between those investor landlords who manage their own properties from the start and those who do not. Nearly a third, 31%, manage from the outset but 42% never manage their own properties. A number of letting offices specifically stated that, in their experience, investor landlords are equally divided between these two categories.

More than three quarters of all ARLA member offices, 77%, believe that the Buy to Let scheme has boosted the Private Rental Sector. More than half, 54%, believe the initiative has raised standards generally, although ARLA offices in the South East tend to be more positive about the effects of Buy to Let than elsewhere in the UK. Less than 20% of those questioned in the South East did not believe that Buy to Let had raised standards in the rental market, against 31% in the rest of the country.

Commenting on the survey, John Crossley, ARLA National Council member responsible for Buy to Let, said: "This survey shows that it is still 'steady as she goes' for Buy to Let. It also continues to show that this is an investment for steady returns and capital investment over time, provided that the sums and the property both stack up from the beginning. This is not an investment for the newcomer to make without proper advice."

The ARLA survey report is based on the responses of 460 member offices during May. It is the second survey of its kind but it has been widened to include branch offices as well as the head offices of ARLA member firms.

Details of the nearest ARLA member agent are available from the ARLA Buy to Let Hotline, 01923 896555 or on http://www.buytolet.co.uk

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