Buy-to-let yields to plummet

Buy-to-let yields have hit a record low, fuelling fears that property investors will sell up. Nationally, gross rental yields are already at a record low of 4.38%, as house prices have climbed more quickly than rents. Research consultancy Capital Economics has forecast that by the end of 2022 yields will hit a new low of 4.26%. As interest rate rises push up land lords' outgoings, next year the margin between rental income and mortgage costs will become the most squeezed it has been since the financial crisis. And the Bank of England's decision to increase the Bank Rate to 1.25% will cause the average net profit on a new buy-to-let property to fall by 15% for a landlord who pays higher-rate tax, according to Hamptons.

The Daily Telegraph