29
Jan
Increasing rents offering healthy yeilds
Growing demand for rented accommodation has encouraged strong
growth in rents paid by tenants, leading to an increase in rental
yields and total returns, according to new figures.
Paragon's January Buy-to-Let index shows that rental incomes rose
by 2.5 per cent during the month, bringing the annualised rate of
growth to 19.4 per cent.
On average, tenants are paying £965 per month for their
properties, compared with £808 a year ago. The total annual
return for 2007 stands at 21 per cent - three times the level of
2006.
"There's been fall in consumer confidence in recent months, but
this appears to be to the benefit of established landlords," said
John Heron, managing director of Paragon Mortgages.
He added: "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."
Some 90 per cent of buy-to-let investors plan to hold on to their
portfolios for the long term and 40 per cent intend to invest more
in the private rented sector this year.
