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Big rent premiums possible on new-builds - claim

New build homes command rental premiums of as high as 41 per cent in the current market, it’s been claimed.

The Unlatch platform has analysed market data on new-build rental premiums and yields and how they differ across Britain.

The average rental value of a new-build sits 23 per cent higher than existing homes in the market but the premium is at its highest in Scotland, where new homes command 41 per cent more.

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Rental income premiums are also high in the North East (33 per cent), Wales (29 per cent), South East (28 per cent), and East Midlands (27 per cent).

Where yields are concerned, Scotland again ranks high along with the West Midlands, South West and Yorkshire and the Humber - all between 4.0 and 3.8 per cent.

 

Lee Martin, Head of UK for Unlatch, says: “New-build homes command a far higher price in the sales market and this house price premium will impact the initial yield an investor can expect to see compared to an existing home, despite these properties commanding a far higher value where monthly rental income is concerned. 

“However, they are fast becoming the investment route of choice and this trend is undoubtedly being driven by the Build To Rent boom and the increasing demand from tenants for better rental homes with a lifestyle focus.”

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  • Mark Wilson

    Isn't this a reflection of how poor the current rental stock is? Its no wonder government wants to get rid of most BTL!

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    Are you a landlord?

     
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    I agree Big Rent premiums on new build totally unaffordable which is why they want us out of the way, those greedy B 2 R with all Government support & tax advantages can’t compete with us which is why there is a sustained attack on traditional LL that the Tenants prefer. Government getting no SDLT from them as I understand it as they are not being sold, just how many billions are we paying and they hate us.

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    The average working tenant simply cannot afford their high rents, BTR is no competition to me , they are in a totally different market place.

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    It may come as a surprise for some but I have no doubt rents are going to soar with B2R, where balance sheets trump value and the care / micro-management afforded by the smaller, discerning landlord, will be confined to the past. Us landlords have been telling our politicians, Shelter, Generation Rent, at al, on too numerous occasions to mention....you need to be careful what you wish for.

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    In Glasgow the purpose built student ghettos has pushed up the level of rents in traditional tenement flats, which the vast majority of students prefer.

    No doubt the same will happen to traditional well-maintained PRS properties when the problems associated with new build high rise boxes become more evident.

  • George Dawes

    All the new builds I’ve seen look like they’ll fall down soon , shoddy construction these days

    The old stuff was built to last

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    Talk to the boys on site, ask them if they would buy one, most would not, these developer new builds are thrown up quick and cheap and over priced, but there are no shortage of mugs queuing up to buy them

     
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    They are over priced stitching up young buyers and pretending to be helping them.
    Help 2 Buy is help for Big Developers and help for buyers to get into trouble. The no Stamp Duty & the help 2 Buy is more than gobbled up by the extra price loaded on the Flat, so there is no saving for the buyer, just as the saying goes beggars can’t be choosers, the Schemes are there to rope them in and drive us out of the way.

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