Rental yields level as prices rise

Posted: 08 Mar 2007 10:41:08 GMT

Rental yields have plateaued over the past three months as property prices have risen across the country, the Association of Residential Letting Agents (Arla) has said

Rental yields have plateaued over the past three months as property prices have risen across the country, the Association of Residential Letting Agents (Arla) has said.

The average price of a buy-to-let investment property grew 10.7 per cent in the three months up to February, said the association.

The average was heavily weighted by London, where prices rose 12.4 per cent, and the south-east, which saw rises of 15.5 per cent, however.

Excluding these areas, the national average actually fell by a marginal 0.6 per cent said Arla.

The survey also showed that London is unusual in choice of investment property. While new-builds dominate in the rest of the UK, period homes are more popular in London.

"London has a heavy weighting in its housing stock towards good quality Edwardian and Victorian property," said Adrian Turner of Arla.

"This can be terraced or detached, mansion blocks or small conversions. They are usually well built and spacious and make good rental propositions."

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