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Property Investment in the East Midlands

east midlands property investing

The mortgage works recently released a statistical snapshot of landlords in the East Midlands. It’s very positive to say the least. Read more below

Rental Yield

Landlords in the East Midlands currently achieve the highest average rental yield of any region, at 6.1%.

Landlord’s Balance Sheet

Another important statistic showed that only 4% of landlords in the East Midlands made a loss. 10% broke even and 57% were able to supplement their day job. A staggering 30% of landlords in the East Midlands were able to make property investment their full-time living.

Financials

We’ve already discussed the average rental yield being 6.1%. The average gross rental income per annum is £7,711, with an average estimated portfolio value of £1.3m.

Tenant problems

The report showed that 38% had encountered rent arrears within the last 12 months. It also showed that 31% of landlords had a void period within the last 3 months.

From our perspective as letting agentS, the right management can help minimise issues such as arrears and void periods. We aim to reduce void periods by getting tenants to move in a day or two after the previous tenant has left. We also offer rent guarantee insurance for £150 per year which not only covers your arrears but will also cover legal fees to evict the tenant. Furthermore, our tenants are all working professionals so we rarely run into issues with rent arrears, but you can never be too safe.

Public Rental Sector

Statistics from the report showed that the average portfolio consisted of 8 properties and that there had been a 16% increase in tenant demand. 10% also bought a property within the last 3 months with another 10% also selling within the last 3 months.

Using our own knowledge of the market, we found many landlords were selling low-end stock to invest in either larger developments or in better areas.

Mortgages

67% of landlords in the East Midlands have a mortgage on at least one property. The total amount owed averages to £503,000 per landlord, with a landlord having an average of 6 buy to let mortgages.

Conclusion

The investment market for the East Midlands looks very positive following the research carried out by TMW. As an estate and letting agents in Derby, we too can see this trend firsthand.

The sales market has continued to grow, with prices hitting their peaks. Although it seems as though house prices are stabilising and becoming slightly more static, properties are achieving their asking prices (when priced correctly).

Rental values have also been increased since the tenant fee ban earlier this year. We’re still increasing rents for landlords as tenancies are being renewed, with the average increase at £25pcm. Some have even been increased by £50 in highly sought after areas.

If you’re a landlord and are thinking about investing in Derby, or even if you’re already a landlord in Derby and need some advice, feel free to call us on 01332 202029.