"Modest house price growth combined with a strong rise in rent values means that landlords across much of the nation have benefited from growing yields since the start of the year."
- Siân Hemming-Metcalfe - Inventory Base
The latest analysis from Inventory Base has revealed that England’s landlords have benefitted from rental yield increases of up to +0.7% since the start of the year.
Inventory Base has analysed how the average rental yield in England, its regions, and its Local Authority districts have changed since the start of the year, based on each location’s average house price and average monthly rent value.
England’s national picture
The analysis reveals that the average yield across all of England currently stands at 5.2%, marking an increase of +0.05% since the start of the year.
This increase is due to the average national house price rising from £294,799 in January 2024 to £308,782 in September (latest available data), and the average rent value rising from £1,263 per month to £1,336.
Highest regional yields
On a regional level, it’s landlords in London who are benefiting from the highest yields, currently standing at 4.9%.
This is followed by the North East (4.8%), North West (4.6%), Yorkshire & Humber (4.4%), South West (4.3%), West Midlands (4.2%), South East (4.2%), East of England (4.1%), and East Midlands (4%).
Strongest regional growth
London has also recorded the largest increase in yields since the start of the year, rising by +0.19%. This is due to the capital’s average house price rising from £511,743 to £525,586, and the average monthly rent value rising from £2,007 to £2,145.
Meanwhile, yield growth in the East of England stands at +0.11%, followed by the South West (+0.08%), and South East (+0.03%).
The rest of England’s regions have seen yields shrink since January, none more so than the North East where they’re down -0.19%. Meanwhile, Yorkshire & Humber (-0.08%), the North West (-0.02%), West Midlands (-0.02%), and East Midlands (-0.01%) have also recorded falling yields.
Strongest Local growth
An analysis of LA District data shows that some areas of England have seen significantly higher yield growth since January.
The highest yield growth has been recorded in Brent, London, where the current average yield of 4.6% marks an increase of +0.7% since the start of the year.
This is followed by strong growth in the City of Westminster (+0.55%), Kensington & Chelsea (+0.47%), and Islington (+0.44%).
Outside of the capital, the strongest yield boosts have been seen in Melton (+0.42%), Dartford (+0.39%), the Isle of Wight (+0.37%), and Stockport (+0.34%).
Highest regional yields
As of now, the LA District with the highest average yields is Portsmouth, where landlords now see an average yield of 6.2%.
In Burnley, the average yield is 6.1%, followed by Manchester (6%), the City of Bristol (5.9%), Newcastle-upon-Tyne (5.8%), Southampton (5.8%), Tower Hamlets (5.7%), and the City of Nottingham (5.6%).
Siân Hemming-Metcalfe Operations Director at Inventory Base, comments: “Despite many naysayers, England’s rental market is thriving. Modest house price growth combined with a strong rise in rent values means that landlords across much of the nation have benefited from growing yields since the start of the year.
"However, landlords currently face significant pressures, including high mortgage costs and government intervention such as the abolishment of Section 21. As a result, profit margins in the modern rental sector are thin.
"Landlords who want to protect and even bolster their profit margins have the opportunity to integrate technology into their daily processes. For example, digitising the inventory process not only reduces the time and cost of completing inventories but also creates a more efficient and error-free system. This ensures they don't incur costs of any damage caused by their tenants.”
