The gross average yield on the typical Ilkeston rental
property stands at 4.2% a year, representing a fall of 0.1% from one year ago,
down from 4.3% in December 2013. Over the last 12 months, property values in Ilkeston
have risen by 4.5%, so taking into account capital growth, total annual returns
on an average Ilkeston property stand at 9.7% over the twelve months to December.
In absolute terms this means the average landlord in Ilkeston has seen a
return, before deductions such as mortgage payments and maintenance, of £12,179
in the last twelve months. This is made up of rental income of £6,048 and an
average capital gain of £6,131.
However, yields for new investors are going to be tough to
make ends meet when interest rates rise, so it’s essential new buy to let
landlords seek the best advice, buy the best sort of property, buy that
property at the right price and factor in mortgage rates of 5% to 6% seen
before the credit crunch. As I don’t sell property, I can look at the whole of
the Ilkeston property market and tell you what I would consider buying, without
any conflict of interest.
A few weeks ago I talked about future property value
increases, so this week I want to finish with my thoughts on rents. You see, at
present, rents are moving in an upward direction, but in the main it is only in
line with inflation. Therefore, from a landlord’s point of view, in real terms,
they are no better off. Ideally if wages were rising, as they should be, with
inflation, neither would tenants be better off either. Finally though, it might
interest readers to know that the rents Ilkeston tenants have to pay for Ilkeston
property are still 4% lower than they were 2008. Considering prices for other
things (gas, food, petrol etc) have risen by 19% since 2008, tenants are
getting a good deal whilst landlords are achieving good returns themselves.
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