Rental yields up in January

Posted: 28 Jan 2008 14:07:17 GMT

Rental yields increased in January as the UK buy-to-let market went from strength to strength.

Rental yields increased in January as the UK buy-to-let market went from strength to strength.

The latest Paragon Buy-To-Let Index revealed that yields reached 6.2 per cent in the month, after remaining at six per cent for the five months previous.

In addition, rental incomes increased by 2.5 per cent in January, taking the annual growth figure to 19.4 per cent.

"There's been fall in consumer confidence in recent months, but this appears to be to the benefit of established landlords. In fact, 2007 proved a strong year for landlords, who generated very healthy investment returns averaging over 21 per cent - three times the level of the previous year," said John Heron, managing director of Paragon.

"Rents have been rising at the fastest rate we have seen since the Buy-to-Let Index was first published in 2001 - by eight per cent in the last quarter of 2007 and 19 per cent over the year.

"With a cooling in the rate of increase of house prices, yields have also picked up this month and we expect that trend to continue throughout 2008," he continued.

Recent research from the Association of Residential Lettings Agents revealed that 90 per cent of landlords intend to hold onto their properties for the long-term.

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