A further four in 10 of those who agree that their property is their pension intend to make a decision dependent on the state of the property market once they reach retirement. Very few landlords plan to sell all properties in their portfolio when they reach retirement.
Rental yields fell by 0.5% to 6.2% in the final quarter of the year. In comparison, the average rental yield was 6.7% in Q3 2012, 6.2% in Q2 2012 and 6.2% in Q4 2011. The strongest performing region was East Midlands with landlords on average achieving a return of 7.1%. In contrast landlords in Yorkshire and Humberside reported the lowest rental yield of 4.6%.
In the final quarter of 2012, on average 2.4 tenants were in arrears, a fall from 3.3 tenants in Q3 2012. Whilst the proportion of landlords experiencing rental arrears has fallen to the lowest level since Q2 2010 (41%) the average amount owed per tenant was £2,613 up £247 since the previous quarter.
Strong and consistent tenant demand has seen void periods fall to their lowest level for over 12 months. Only 33% of landlords reported void periods in Q4 2012, a 4% decrease compared to Q3 2012 and a 13% decrease compared to Q4 2011.
The average duration of a void period has fallen consistently over the past year to an average of 60 days. The greatest proportion of void periods was seen in the North East (53%) and the lowest proportion in Central London (20%).
Phil Rickards, head of sales at BM Solutions said; "The private rental sector remains an alternative source of long term investment for landlords for later life and this does not look like it is set to change. Whilst rental yields have dipped slightly, they still remain at the high levels we have seen over the past few years."
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