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Report: Rental yield and tenant demand Q1 2022

17 Jun 2022

According to our most recent research, carried out in March 2022 in partnership with BVA BDRC, an all-time-high proportion of landlords, 62%, are reporting that tenant demand has grown, as cities recover from the Pandemic lockdowns. 

House Bank Article

Landlord confidence has risen overall, especially in their expectations for rental yields and tenant demand.

Landlords in the South-West, Central London and Wales were experiencing the highest level of tenant demand with London experiencing significant improvement since the pandemic, where 30% more landlords are now reporting an increase since Q2 of 2021.

Overall, Tenant demand over all regions were increasingly strong in March with only 2% of landlords reporting that they think tenant demand is presently weak. 

However, in contrast, the same research revealed that the average rental yield had dropped by 0.5% and now stands as 5.5% in Q1 2022, compared to Q4 2021 when it was 6.0%. This made it the lowest percentage recorded since 2020. However, this contrast may be due to the delay between tenant demand and the receipt of the first rent, or indeed a full annual rent for yield calculation purposes.

The regions Wales and the North East continue to establish the highest rental yields despite small declines of 0.9% and 0.8% respectively this quarter, with London landlords reporting the lowest.

Landlords with HMOs continues to achieve the highest rental yields at an average of 6.8%, and the highest paying tenant type is migrant workers.

The report also revealed that 1 in 4 landlords do not know what their rental yield is, demonstrating the importance of the continued availability for expert advice from professionals.

Naturally, in this fast-paced economy, we can expect a great deal of change, so please return for our next quarterly report which will be available from mid-July.

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