Buy-to-let rental yields break 10,000 barrier, finds Paragon Mortgages

The average landlord rental income has risen above 10,000 for the first time since Paragon Mortgage began its Buy-to-Let Index.

15:59 23 December 2004

The average landlord rental income has risen above 10,000 for the first time since Paragon Mortgage began its Buy-to-Let Index.

It is the third month in a row that yields have risen, meaning landlords are now receiving 8.5 per cent more than they were in September.

"Landlords have been seeing steadily rising rental incomes over the past three months, helped by good levels of tenant demand which is in part attributable to the ongoing impact of affordability constraints on first-time buyers," said John Heron, managing director of Paragon Mortgages.

He added: "This is now feeding through into higher yields, which have risen for the last two consecutive months, despite the fact that buy-to-let property prices have continued to rise steadily.

"With solid returns on their lettings businesses and strong levels of capital appreciation over the past year landlords continue to benefit from good overall returns - taking into account both rental income and capital appreciation.

"Overall returns have now reached 29.5 per cent, up from 24.5 per cent last month and 23.6 per cent in September this year."