The rise in buy-to let activity could be as a result of increased average weighted rental returns too: houses are up substantially from 4.8% to 5.1%. Flats are also up from 4.9% to 5.0%. Unsurprisingly, rental returns for houses in Prime Central London were far lower than the national average at 4.7% but returns for flats remained consistent across the UK.
Ian Potter, Operations Manager of ARLA, said: “Each quarter we glimpse a bit more activity as the bargains get snapped up and confidence is restored in buy-to-let as a viable long-term investment vehicle, particularly if the returns are rising too.
“The Government has started to look at the PRS a bit more closely, recognising just how important it is to the property market as a whole. Some initiatives – such as the interest rate cut – appear to be having an effect albeit indirectly but there’s still a long way to go to. However it is fair to say that these signs are encouraging and I’m hopeful that this may mean that we’re starting to see the bottoming out of the market.”
The data from the second quarter of the ARLA Members’ Survey of the Private Rented Sector is drawn from 730 offices. The survey is supported by mortgage lenders Mortgage Express and Paragon Mortgages. Together with the Survey of landlords, this forms part of the quarterly ARLA Review and Index. All surveys and statistics can be downloaded from www.arla.co.uk
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