According to the HomeLet Rental Index for May 2015 the rent being charged by landlords on properties in London is increasing at a higher % than elsewhere in the UK. This is probably not going to come as a surprise to most people as it merely follows what tends to happen with property values in our capital city.
The index reveals that new tenants in the three months to May 2015 taking up occupation of a property in London would pay an average of £1,472 pcm – that is an increase of 9.2% when compared with the three months to May 2014. In the rest of the UK, rents went up by 7.6% to an average of £738 pcm when comparing the same periods.
It is interesting that the index also looks at the rise in income tenants received for the same period as this showed that, across the whole of the UK, incomes only went up by an average of 2.4%.
When the average rent someone is paying in May 2015 is compared with what they were paying in May 2014 in the UK it was found to be 12.5% more – £960 pcm.
Obviously, from the landlord’s point of view, these figures will make pleasing reading. However, anyone considering entering the lettings market as a new landlord should make sure that they do all their research to establish if their new venture is likely to prove to be a profitable one.
A new landlord should prepare a detailed business plan taking into account numerous factors to help establish the viability of their new venture. For instance, it is not only about how much rental income they can get for a particular property but also things like what expenditure the business will have such as buy-to-let mortgage repayments, landlord insurance estimated maintenance costs to name but a few. The location and type of the property is also very important.