Buy-to-let yields accelerate in January

Posted: 01 Mar 2007 11:00:40 GMT


            Property News - Buy-to-let yields accelerate in January

Rental yields across the UK rose 2.5 per cent in January, figures from buy-to-let specialist Paragon Mortgages have shown

Rental yields across the UK rose 2.5 per cent in January, figures from buy-to-let specialist Paragon Mortgages have shown.

The monthly growth was up from 0.4 per cent in December and brings the average annual rental income up to £9,942, or £829 a month.

"Demand for properties in the private rented sector remains solid, which is feeding through into higher rents," said head of Paragon Mortgages John Heron.

"At the same time, investors have been actively growing their portfolios in response to higher rents and rising yields."

Demand in London and the surrounding regions continued to drive the increases following a bumper year for city bonuses and net population growth in the south-east.

Outside the capital, East Anglia was a particular hotspot for both rents and overall yields, with average buy-to-let returns in the region at 18.3 per cent.

"Investors who understand the long term dynamics of the market are not spooked by recent modest rises in borrowing costs, and are continuing to grow their portfolios in response to growing tenant demand and rising rents," concluded Mr Heron.

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