Rent Rise Welcome Relief to Landlords Affected by CGT Rise
Following an increase in capital gains tax (CGT), landlords welcomed the news that the average cost of renting property in the UK has increased.
LSL Property Services has released its latest Buy To Let Index, which showed that the average rental rate rose in May to £667 – an increase of 0.5 per cent. It was the fourth month in a row that rents have risen.
Compared to this time last June, average rent levels are now 2.7 per cent higher. This equates to around £18 per month more rent per month.
The rise was not recorded throughout the country though – rates in the North East actually fell by 2.7 per cent, and in the North West they also fell by 0.2 per cent. In London, rents increased by 1 per cent, with the average monthly rent recorded at £924. The West Midlands saw an increase of 2.1 per cent, to £540 per month on average.
Additional good news was that the cost of renting has continued to increase faster than average house prices, which meant yields were at their highest level of 4.8 per cent since December 2009.
David Brown, commercial director of LSL, told residentiallandlord.co.uk: "House price increases have steadied and rental income is now accounting for an increasing portion of a landlord’s total return. Rents have continued their upward climb and are just £21 short of their all-time high". He also remarked: “With the Government likely to raise capital gains tax, capital gains may no longer be taxed more lightly than rental income.”
Property Investment news posted by Garry on 25 June 2010
