This allows the ARLA panel of mortgage lenders to express the movement of buy to let investments in a manner that is comparable to stock exchange and commodity indices.
Taking all factors into account, in the three months to the end of May, the Buy to Let Cash Purchase Index showed a rate of return of 9.3%, down from 9.45%. The Geared Investment Return was 18.65%, down from 19.06% in the previous three months.
Changes over the last quarter include marginal increases for both Cash Purchase and Geared Investments in London and the South West. There were marginal falls throughout the rest of the country producing an average fall in cash purchase returns of 0.15%. On a Geared Investment, the Index reflected an average fall of 0.41%.
Announcing the latest figures, John Crossley, Chairman of ARLA, said “This quarter’s indices provide ample evidence of the stable nature of buy to let investments. The indices have fallen only by some three points during a period of worldwide hyper-volatility and tension and many differing reports about house prices. Overall, buy to let returns have continued at broadly the same level since the ARLA Index was launched last September.”