The UK is now the fifth worst place in Europe to make a buy to let investment, according to the latest European Buy to Let League Table published by WorldFirst.
The league table shows that Britain has slid ten place down the rankings, now sitting at number 25, following a series of reforms to the private rented sector including the Section 24 cuts to mortgage interest tax relief, hikes to Stamp Duty and the cap on tenants’ deposits.
According to WorldFirst, yields on UK rental properties fell from 4.91% to 4% compared to last year.
The UK finds itself alongside Sweden, Croatia, France and Austria at the bottom of the rankings, where investors can expect yields of less than 4%. Sweden was ranked as the worst European country for buy to let investors, due to high property prices, stagnant rents and its highly regulated rental market.
Edward Hard, economist at WorldFirst, said; “The correlation between a country’s housing sector and the health of the wider economy is clear. It may now be the case that the deteriorating dynamics of the UK’s rental market is sounding the alarm for a wider slowdown in residential housing and thereby broader economic well being.
“Long term investment decisions have become increasingly difficult to make and falling returns for property investors could mark the beginning of the end for one of the UK’s most successful investment avenues of the past 25 years.”
Falling rental yields will add more pressure for already struggling landlords who have found their finances hit by recent waves of reforms to the buy to let sector.
If you’re a landlord struggling to cope with your outstanding property debt due to rising costs or falling yields, contact Landlord Debt Advisory on 0161 222 4311 or fill out a contact form to arrange an initial free consultation.