AST Yields

Graph 6 provides a comparative analysis of gross yields for properties subject to an Assured Shorthold Tenancy achieved at auction in the four key RAPID geographical areas since 2004.

Returns in these regions were at their most diverse over this period in 2004, the highest average returns being in the north of England, Scotland and Northern Ireland at 10.08% and the lowest in the South East and Eastern region at 6.6%. Yields converged in these areas towards 2006 but have diverged since and continue to do so. Currently, gross returns are lowest in London at 7.96% and highest in the Midlands, Wales and South-West at 8.97%. Only in Northern England, Scotland and Northern Ireland have yields remained higher than the national average for virtually the entire period. Since yield and the prospect of capital appreciation are generally inversely related, it is assumed that, in this area of study, investors buy for income rather than growth.

Graph 6