Landlord profitability is at an all-time high while rental yields remain largely stable in the UK residential property market, latest research by the National Landlords Association (NLA), reveals.

NLA Survey

This indicates the health of the UK property market, which continues to attract investments because of its strong housing fundamentals.

The NLA conducts quarterly surveys of its members through their partners BDRC Continental Ltd on a wide range of issues related to landlords’ business and investment interests. The Landlord Survey Q1 2017 (January-March) offers useful insights into the UK property market. The proportion of landlords feeling optimistic about the UK’s financial markets has more than doubled year-on-year while the other key confidence indicators remain stable.

“Over the course of the last decade, the NLA has tracked landlord optimism about a whole host of aspects of the PRS (private rented sector) and wider investment opportunities. We then aggregate these results to form an indicative optimism metric - currently sitting at +24. In respect of their own lettings business, this figure is somewhat higher at +41, thanks in large part to strong rental yields,” the NLA said in its report.

The landlords in the North West and East Midlands in the UK are currently generating the highest rental yield at 6.3 per cent, while those in outer London achieve yields at 4 per cent. The tenant demand remains strong because of the chronic under-supply of property, especially owner-occupier homes, across the UK. A group of landlords (around 750 individuals in this instance) are reporting stronger profitability than at any point in the last six years, according to the NLA.

Though this doesn't necessarily mean that landlords are making more profit than they were previously, the fact that the yields have remained largely constant for the last few years shows that a higher proportion of landlords in the UK real estate market are able to make a profit. This is one of the major reasons for investors, especially those from overseas, to acquire buy-to-let property in the UK.

Despite several setbacks in 2017, investors, including domestic house-buyers, are continuing to invest in residential properties across the UK because of assured rental income. Majority of the landlords, who already own homes, however, are not keen on acquiring a second buy-to-let property in view of taxation issues.

If you are an overseas investor keen on acquiring a buy-to-let property in London, we have several options in our prestigious developments – Hoola in Royal Docks and Sky Gardens in Nine Elms / Vauxhall. Connect with our estate agents at any of our global offices for more information.

Source: National Landlords Association (NLA)