Buy to Let Yields Up

Landlords who are presently experiencing a record high in rental yields on buy to let properties now seek to expand their property portfolios, two new reports have revealed.

According to Paragon Mortgages, the latest buy-to-let index shows that the average yield has risen to £9,600 on UK buy-to-let properties, setting it at an all time high.

Concurrently, Mortgage Trust revealed that landlords are expanding their portfolios of buy-to-let property. In May 2005, buy to let property investors held an average of seven and a half properties each. This is expected to rise to approximately eight and a half properties within the next year.

While rent increased, slowing growth in house prices meant the average annual return on investment property remained at 21 per cent in July 2005.

John Heron, managing director of Paragon Mortgages, explained, “Total annual returns generated by landlords are still healthy, with northern and western parts of the country doing particularly well.”

Landlords in north-west England and Yorkshire have performed particularly well, having see returns of roughly 40 per cent on their investment.

Rental incomes have been rising steadily and have increased to 9.7 per cent in the past twelve months. With interest rates and mortgages expected to fall in the coming months, this should see an improvement in ROI.

Date: 28.07.05

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