My comments here last month that market conditions were looking very positive for the year ahead have been questioned by some readers via email. The main point of challenge is that although the economy is improving and property sales are increasingly healthy, residential rents are not booming ahead and as such net yield returns are not what they were ten years ago in many regions.
These are fair comments and applicable to most UK regions, even to the wider London area, where the property sales market is without doubt firmly back in boom mode. However my comment here was being made from the perspective of property development with a buy to sell strategy rather than that of the outlook for income from a residential landlord.
It's a fact that average rents in many regions have not kept up with inflation 'in real terms' - and there are a number of reasons why that is the case, which include the influence of the government's welfare reform programme reducing housing benefit payments. Probably the main influence is that buy-to-let is an undoubted success story which has attracted many new landlords into the sector thereby giving tenants more choice. This has also had a positive effect by driving up accommodation standards ensuring that landlords who provide good quality rental properties are rewarded while those who don’t are more likely to have voids.