About:As year-on-year rental yields growth at a faster pace, the UK property market’s supply-demand gap is assuring further growth in the future.

Summary:

• The pace of UK property rental yield rises continues to increase
• A growing gap between the supply of quality rental accommodation and the demand for the property will contribute to future increases in both values and yields
• Yields and demand for rental accommodation are strongest in the regional cities of the UK

The average property investment yield in the UK reached £937 per month in July.

A significant shortage of suitable rental property is contributing to rising rents, with Countrywide’s figures highlighting a year-on-year increase of 4.6% last month – up from 3.8% in June.

Some of the strongest yield rises were found in Scotland (4.5%) and the east of England (4.3%), while London remains the most expensive place to rent in the UK.

Tenants are now asked to pay an average £2,583 a month in central London and politicians are calling for New York-style controls on landlords.

Consequently, regional cities such as Manchester and Glasgow are offering property investors stronger future growth prospects, combining lower property prices higher yields and growing demand.

The nationwide growth of the sector has meant that many landlords and investors have retained their assets for longer, which has had the effect of further restricting supply in the housing market. Countrywide estimated up to an extra 100,000 property sales may have been finalised if the private rented sector had not experienced its strong growth in returns.

Yields are predicted to increase further in the future.

Above:The market conditions have prompted surveyors to forecast both significant property price and rental rises in the coming 12 months.

Recently, the Royal Institution of Chartered Surveyors revealed the supply of new properties has fallen for six months in a row, while the amount of buyer inquiries has risen for four consecutive months. The market conditions have prompted surveyors to forecast both significant property price and rental rises in the coming 12 months.

Source: Select Property