Slimmer yields for landlords in 2014? Not for our investors…

According to ARLA, the average yield across the country has fallen to around 5.5%. A journalist recently put this point to me and asked (somewhat sceptically) how we could offer much higher yields.

I responded that average returns are just that.  They represent what an average investor buying an average property in an average area could expect to achieve.

That statistic encompasses properties where yields are 1% and properties where they are 14% or more.  We research areas where the average yield is higher and then cherry-pick the best deals in that area to maximise yields.

The criticism is akin to saying “Usain Bolt claims to be able to run 100m is 9.69 seconds but how can that be when our research shows the average time to complete 100m is 14.8 seconds.”

In short, we are not your average investment company.

Having said that, we are susceptible to market conditions as is everyone and as house prices increase at a higher rate than rents, it is inevitable that yields will decrease.

So, does that mean we will not be able to offer our clients such attractive returns?

No.

It simply means we have to adapt. We are experienced in many areas of property investment, are extremely flexible and already have plans in place to ensure that we can still offer you very attractive returns whatever the market conditions.

The new areas we are moving into and the new business model we are launching next month will enable us to continue to deliver well above average returns.