Buy to let property returns up almost 10% year on year in England and Wales

Total returns for buy to let property in England and Wales rose to 9.57% in the 12 months to the end of March, according to the latest buy to let index to be published.

Overall buy to let portfolios fell 0.31% month on month, were up by 2.31% quarter on quarter, and by 9.57% year on year, the data from the Property Partner residential market index shows.

The growth over 12 months has been led by London where buy to let returns increased by 16.49%, followed by the East of England with a rise of 13.18%, the South East 12.1% and the East Midlands 8.59%.

The North West was not far behind with a rise of 8.44% and the South West at 8.42%. The West Midlands saw a rise of 6.08%, Yorkshire and Humberside 4.51% and the North East 2.57%.

According to Rob Weaver, Property Partner’s director of investment the strong growth in the year to March 2016 was probably affected by property investors rushing to beat April’s additional home stamp duty deadline.

‘This was especially true of London, where annual returns were in double digits, reaching an eye-watering 16.5%. The East was strong too, and from first hand experience the Northern Powerhouse regeneration plan is boosting investment activity in the North West and in particular Manchester,’ he said.

He pointed out that monthly figures can be volatile. ‘What’s clear is that regional disparities in the housing market are widening, with Yorkshire and Humberside and the North East regions looking fragile,’ he explained.

He also pointed out that property investors are showing caution ahead of the referendum in June on the future of the UK’s position in the European Union. ‘But the fundamentals of high employment, wage growth, cheap borrowing and the chronic shortage of supply remain in place and are positive,’ he added.

The index is the first regular dataset to combine rental income and capital growth to show the total rate of return of residential property investments over time. It is based on research carried out by the property crowdfunding platform Property Partner of Land Registry and ONS data.

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