Students offering especially strong average rental yields, says TBMC

Landlords rent insurance policyholders will find plenty to like in the latest Landlord Profile Tracking Index of TBMC, which tracks developments in the UK's buy-to-let mortgage market. The report's findings for the third quarter of 2013 confirmed the continued stability of the residential property investment environment throughout the year to date, with good rental income assured by high tenant demand and competitive rates also available on buy-to-let mortgages, Advanced Rent (http://www.advancedrent.co.uk) reports.

The most recent report highlighted a series of trends that will interest rent factoring policyholders, including continued strong average rental yields, continued low buy-to-let mortgage rates, fairly evenly split demand for variable and fixed rates and evenly split demand for purchase and remortgage products. The result of these trends is an average rental yield exceeding 6 per cent since the turn of the year. In the third quarter of 2013, there was a 6.06 per cent average rental yield for buy-to-let applications that TBMC had processed.

However, the Landlord Profile Tracking Index also showed that by far the highest returns were consistently delivered by student tenants, with the average rental yield from a student during the third quarter being 7.5 per cent - compared to the 6.06 per cent overall average. TBMC's chief executive Andy Young said: "It is surprising therefore that such a small percentage of applications processed by TBMC have been for properties rented out to students." He said that only nine of the 425 applications sampled in the third quarter were for student properties, making up just 2 per cent of the total - compared to 62 per cent and 33 per cent for families and professionals respectively.

Young admitted that there may be reservations among prospective rent guarantee scheme policyholders about student renting, perhaps including that such tenants would not be reliable payers or would cause a heightened property maintenance bill. However, potential holders of a rent indemnity policy may want to cast their eye over recent National Landlord's Association research, showing that students are actually among the most reliable tenants - with only 38 per cent of student landlords experiencing arrears over the past year, compared to 59 per cent of those that let to blue collar workers, 40 per cent that rented out to families and 71 per cent letting to those receiving benefits.

The report for 2013's third quarter also showed continued low interest rates being offered, with the average variable rate chosen for mortgage offers that TBMC processed during the period being 4.25 per cent, while the average fixed rate was 4.15 per cent. It would seem that such attractive fixed rate deals are certainly drawing in landlords, with 56 per cent of the offers processed by TBMC during the quarter being for fixed rate products.

Certainly, the Index should give prospective or current landlords greater confidence to start or add to their portfolios over the coming months - and with products like Rent Guaranteed from Advanced Rent (http://www.advancedrent.co.uk), they can be assured of even greater financial security.

Editor’s Note: Advanced Rent (http://www.advancedrent.co.uk) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.