Landlords’ total annual returns in 2009 will hit 4.1% and 2010 will be stronger still, according to LSL Property Services.
2009 saw buy-to-let re-emerge as an attractive investment, according to LSL Property Services, owner of the UK’s largest lettings agent network, including chains Your Move, Halifax, and Reeds Rains.
By the end of the year, total annual returns had reached 4.1%, allowing for a rental yield of 4.6% after voids and a small capital loss on falling house prices. In 2009, a typical landlord lost just £600 on the capital value of his property, but earned £8,000 in rent, leading to a total profit of £7,400.
By contrast, in 2008, a typical landlord would have lost 8.8% even after allowing for rental income. This means for 2008, a typical landlord lost £23,000 in capital as the property fell in value, and earned £7,900 in rent for the full year, leading to a total loss of £15,100.
For 2010, landlords can expect to make £8,000 in rental income and at slightly below current trends, capital gains of around 5%, equivalent to a capital return of around £8,000. This would bring a total return of £16,000, or just under 10%.
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