The average yield for landlords with residential rental properties have fallen in the last three months, according to research.
Data from Mortgages for Business reveals that landlords with rental properties saw their yields fall to 5.8% from 6.4%.
Landlords with houses in multiple occupation (HMOs) saw a bigger drop to 9.3% from 10.6% in the second quarter of 2015.
It's not all bad news for landlords, those owning multi-unit freehold blocks saw yields rise by 0.8% to 7.1% though this rate is still below the yields being enjoyed last year.
The managing director of Mortgages for Business, David Whittaker, said: “Rental yields appear to have lost momentum between the end of 2014 and the beginning of this year.”
Property values in the UK fell slightly
He added that the property values in the UK fell slightly in the second quarter along with the average loan amount being granted by lenders - suggesting, Mr Whitaker says, that some mortgage lenders are looking for signs of economic improvement.
The data from the firm also reveals that the average loan to value (LTV) is also falling for some with the average rate on a standard buy to let remaining unchanged at 66% while for HMOs it's fallen by 1% to 69%.
Mr Whitaker also says that the General Election also had an impact on LTV ratios with many people expecting another coalition government with various plans to impact on the country's private rental sector.
Every landlord in Wales to undergo 'training'
Meanwhile, it has been announced that every landlord with rental properties in Wales is expected to undergo 'training' when new licensing rules begin this autumn.
The move follows the trend by some local authorities in England that landlords must demonstrate they are 'fit and proper' for holding a licence.
However, the Welsh proposal goes one step further and insists that before registering with Rent Smart Wales, all landlords must undergo some training.
The new licensing scheme covers the entire country and the country's housing Minister, Lesley Griffiths, says that the new scheme is 'essential' to protect renters.
New scheme will help good landlords
She said: “The new scheme will help good landlords and improve the sector's reputation and improve the situation for tenants by informing them of their responsibilities and rights.”
The new scheme, which will be run by Cardiff Council, is replacing the voluntary Landlord Accreditation Scheme.
Landlords not wanting to undergo training will need to appoint a licensed letting agent to manage their rental property instead.
The vice-chair of the Residential Landlords’ Association for Wales, Douglas Haig, said that the new scheme will stretch resources and not tackle a minority of criminal landlords.
He added: “The existing private rented sector regulations are sufficient but we don't see adequate enforcement powers.”
