Posing as first a tenant, and then a potential property investor, researchers enquired as to how much a two-bedroom flat in specific developments could be rented for.
Whilst London (25 per cent) and Birmingham (13 per cent) boasted the most inflated prices for the second year running other areas of the country showed a different trend.
Letting agents in Manchester and Liverpool massively under quoted potential rental returns (-25 per cent and -15 per cent respectively). However, for the second year running Sheffield appears to boast the most honest agents who quoted the same to both tenant and investor.
Overall, the trend is for agents to quote approximately the same to both class of caller, compared to an overstatement of 8.5 per cent last year. This indicates a more cautious approach taken by letting agents, perhaps brought on by increased competition to find rental properties.
Lee Grandin, managing director of Landlord Mortgages, commented: “These results show that it is still crucially important for landlords to thoroughly research prospective properties before making any purchasing decisions. By relying purely on the advice of letting agents some investors may be facing a serious rental shortfall, or even be put off a perfectly good property by an overly pessimistic assessment.
“Other feedback from the research indicates that extra features such as allocated parking can really boost the expected rental income as more people will be tempted to move away from city centers. Investors who thoroughly research their potential investment looking for features such as these can expect higher rental income and fewer void periods.”
