Rental returns rise despite house price growth

Posted: 01 Dec 2006 10:16:26 GMT

Buy-to-let returns rose from 10.5 per cent in September to 13.3 per cent in October, based on capital appreciation and rental returns on property bought last year

Buy-to-let returns rose from 10.5 per cent in September to 13.3 per cent in October, based on capital appreciation and rental returns on property bought last year.

The figures came from research by Paragon Mortgages, based on government statistics recently released on the housing market.

The market has continued to expand on the back of growing rental demand, with tenant numbers continuing to outstrip the growth in new properties, said Paragon.

The number of tenants has increased 22 per cent since 2001 with 3.7 million now in social property.

"With this solid demand, rental yields have remained steady over the past six months at six per cent despite house price increases," said Nigel Terrington of Paragon.

"We have seen steady activity on the part of residential property investors, who are growing their portfolios in response to additional demand from a variety of different types of tenants, including foreign migrants, young professionals, families and students."

© Houseladder Ltd




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