Buy-to-let yields at two-year high
buy-to-let investors are enjoying their highest yields since the start of 2006, new data has revealed.
According to Paragon Mortgages' buy-to-let index, people with flats to rent in London and elsewhere can now expect an average yield of 6.4 per cent on their dwellings.
That marks a 12 per cent rise over the past year and according to many analysts is a consequence of falling demand for home purchases, with many prospective buyers scared off by the current market turmoil.
"Strong tenant demand has been pushing up rents, allowing landlords to achieve better yields than they've seen for more than two years," explained John Heron, managing director of Paragon Mortgages.
"With lower property prices and higher rents, the yield they can achieve on a carefully selected and well managed investment property can be significantly higher than other forms of investment."
According to Paragon, 74 per cent of landlords say that opportunities to get a good deal on a property encourage them to expand their portfolios, even in the midst of market uncertainty.
Published 24th June, 2008
© 2008 Estates IT Limited
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