The September Buy-to-Let Index from LSL Property Services plc, has revealed landlords saw an average total annual return of 6.2% on a rental property in September, up from 5.5% in August.
This represents an average return of ï¿¡10,216 with rental income of ï¿¡7,909 and a capital gain of ï¿¡2,307.
If rental property prices maintain the same trend seen in the last quarter, an average investor in England and Wales could expect to make a total annual return of 9.2% per property over the next 12 months. This is equivalent to ï¿¡15,226 per property.
Rents have climbed 3.2% across England and Wales on an annual basis hit a new high of £741 per month.
David Brown, commercial director of LSL Property Services Brown said whilst rising rents could be a source of financial pain for many tenants, but they are increasing the appeal of entering the buy-to-let sector.
Rent in England & Wales rose by an average of 1.1% in September.
The previous record high was ï¿¡734 in August. On an annual basis, rents have risen the fastest in London, where they climbed by 6.2%.
Mr Brown said: “Rents have risen consecutively for half a year as tenant demand strengthens on the back of a historically subdued mortgage market.
“However, every pound monthly rents go up by is another pound that renters can’t save for a deposit for their first home.
“This is lengthening their stay in rented accommodation, and increasing competition in the private rented sector.”
