UK residential rental property returns slow in May: the buy-to-let market remains tough for smaller private landlords; annual investment performance for listed corporate landlords has been resilient
The latest monthly figures from property investment specialist, BondMason, show a slow-down in investment performance during May for both listed corporate landlords and private landlords in the UK’s residential rental sector.
However, the investment return for listed corporate landlords continues to show a resilient annual performance: up +5.7% p.a.
Comparing the performance of listed corporate landlords and private landlords in the UK, BondMason’s residential property investment research shows that in May 2019:
- the return from shares in listed corporate residential landlords was down -0.7% in the month of May; but up +5.7% annually (1 June 2018 – 31st May 2019)1
- the estimated return achieved by private residential landlords was down -0.6% in May; and up +2.9% annually (1 June 2018 – 31st May 2019) 2.
Stephen Findlay, CEO of BondMason, comments:
“The annual investment returns of listed corporate landlords remains resilient against a continuing backdrop of subdued house price growth. Whereas private property owners are continuing to be hit by the impact of tax changes and new regulations.
This trend may continue for the near future as many smaller private landlords are choosing to reduce their property portfolios and sell up. Conversely, we are seeing an increase in the number of corporate landlords entering the market as they fill the gap left by private buy-to-let landlords, and to meet the continuing demand for rental properties in the UK.”
- annual house price growth slowed to 0.6% p.a. in May (down -0.2% month-on-month and remaining below 1% for six months in a row)3; and
- the FTSE was down -2.5% in the previous 12 months ending 31st May 2019 (down -0.2% month-on-month)4.
Notes for Editors:
BondMason is a property investment specialist, providing insights and analysis from the UK property market, and is run by an experienced team of investment professionals since 2014.
BondMason monitors trends in the UK buy-to-let sector, tracking investment performance of residential property through its:
- BondMason UK Listed Landlord Index (BLLI): records the financial performance of listed corporate landlords in the UK
- BondMason UK Private Landlord Index (BPLI): estimates the returns achieved by the average private buy-to-let landlord:
BondMason is one of only a handful of providers to receive a 5-star rating from Defaqto (the leading independent assessor of financial providers).
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Important Regulatory Information
This article is intended for discussion purposes. Without limitation, this document does not constitute an offer, an invitation to offer or a recommendation to enter into any transaction. Nothing in this article shall be construed as advice. Please contact your Financial Adviser for guidance. The information and opinions it contains have been compiled or arrived at from sources believed to be reliable at the time and are given in good faith, no representation is made as to their accuracy, completeness, or correctness. Any opinion expressed, whether in general or both on the performance of individual securities and in a wider economic context, represents the views of BondMason at the time of preparation. They are subject to change. Past Performance is not a guide to future performance. Residential property values are affected by factors such as interest rates, economic growth, fluctuations in property yields and tenant default.
3 Nationwide House Price Index – May 2019
4 FTSE 100 Total Return – May 2019