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The UK residential property market now offers high rental yields of up to 10% a year according to investment specialists Managing Partners Limited.

It says while there might still be some downside left in the property market, it is highly likely to be close to the bottom. Jeremy Leach, managing director of MPL, says: “Although prices could fall further, investors should recognise the yields now available in the market are very high and much better than interest rates available elsewhere. We had yields of 6% in the past on our property investments but we are now getting more like 8-10%.

"In the longer term there is the potential for substantial capital appreciation too. We have been buying properties over the last three to four months at levels better than last year. Last year our property fund returned just shy of 10%. We will be taking further advantage of the correction in property prices.”

MPL recently held a debate on the future of buy to let and the experts remained bullish.

Ray Boulger, Senior Technical Manager at John Charcol, says: “The buy to let sector will come back into play soon and will be ahead of self-cert and sub-prime. Lenders who are seeing buy to let performing well will be keen to expand in this market when there are more funds available.”

Graeme Boiardini, director at IFA firm Bayliss Clarke, said there were huge opportunities in the buy to let market, with double digit yields available. He says: “Canny people have been buying in Portsmouth and city centre apartments. Stock is being sold in Liverpool and Manchester at sensible prices for people who see it as a long term deal. Some properties in Manchester are 50% below the market prices of last year’s valuations. High yields are available but it may take a while to get tenants. If you want value then it has to be city centre apartments because nobody wants to buy them.”

Yields of 10% a year mean healthy profits are assured. If you want to take advantage of these sort of margins a good mortgage is crucial so as to take as little from your profits as possible.

SOURCE: MPL, 16/06/09

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