Average rental yields have hit an all-time high this year, with the North West of England being named as the top area for growth, by landlords in the residential market.
According to the Guardian Newspaper, last year saw monthly rents hit record levels with prices rising by an average of 7%. This naturally goes against the recently published inflation figures, so has the UK hit a peak this year?
Letting agents in Gloucester will be pleased to learn that Gloucester has claimed 3rd position in the average rental yield, rising by over 19%. This is due to investors looking to invest in areas away from the big cities that have in the past done well. These areas may well be improving their infrastructure and transport links and rejuvenating parts of the town or city with large investments. Other hotspots are Carlisle and Blackburn, with savvy investors buying cheap.
Have prices peaked?
The UK has hit crisis point in the housing market, with rocketing house prices forcing the population to rent instead. Demand is still high for rental properties, as big city property prices are out of reach for most. In places like Greater Manchester, a staggering 42% of residents rent a property, because they can no longer afford to buy.
However, sky high rents are now ensuring that many families are struggling to make ends meet, let alone save up a deposit to purchase a house. This causes instability and unrest for future housing.
In theory, you would expect rental prices in the hotspot areas to have peaked and to see them start to level out, as rent becomes more expensive per month than mortgages. However, those areas on the increase may not have yet reached their optimum level, before they start bottoming out.
If you are looking to rent where the prices are still relatively affordable compared to other areas, then Gloucester will certainly be one of the towns to consider. Paying a visit to one of the local agents like Tolley-Gibbs Residential (http://www.tgres.co.uk/about-us) can certainly help in sourcing a decent property with reasonable rent.
Bear in mind though, that all areas will eventually reach their optimum level at some point in the future. Perhaps we will then see a drop in property prices to counteract rising rents. Nobody has a crystal ball though!