Rental demand 'high' and yields 'good'

Posted: 11 Aug 2008 13:38:31 GMT

As the housing market cools, professional investors could be set to benefit from falling prices, the Times has reported.

The Halifax Index has shown that prices have fallen 11 per cent since a peak last August and the International Monetary Fund has estimated that values will drop by 15 per cent in the next two years.

Jennifer Hill of the Times said that properties with sitting-tenants have been offered up at discounts of up to 40 per cent.

She warned however that properties with sitting tenants are often occupied by those who are living there at discounted rates which mean rents can be low.

According to Ms Hill, rental demand is high and rental yields are good as many first-time buyers are priced out of the market.

Add to this the fact that some lenders have reduced their buy-to-let tracker rates "this has cut interest-only buy-to-let lending costs on a £200,000 loan by £100 a month".

Paragon Mortgages' Buy-To-Let Index has shown that rental yields remained stable at 6.4 per cent for the second consecutive month in June.

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