Research commissioned by specialist buy-to-let lender Paragon Mortgages, has shown a significant regional shift in the rental yields achieved by landlords. Those achieving the highest average yield were in the North West, generating a yield of 6.6% - an increase from 5.9% in Q4 2011.
The Northern regions dominated the top spots, with landlords in the North East achieving an average yield of 6.5%. Following in third place was the South West with a yield of 6.4% and the East of England with 6.3%.
Yields, a property’s annual rental income as a proportion of its current value, are an important factor for landlords when making a property purchase decision.
Independent researchers, BDRC Continental, worked with Paragon Mortgages to survey more than 500 landlords – some of which were Paragon Mortgages and Mortgage Trust customers – in the first quarter of 2012. The overall average yield achieved by landlords in Q1 was 6.2%, an increase on Q4 where the average yield was 5.9%. However, those Paragon landlord customers who took part in the survey reported a higher than market average yield of 7.3%.
John Heron, Director of Paragon Mortgages, said:
“The rental yield figure is important for landlords as it gives a good indication of how well a property, and in a wider sense, a portfolio is performing.
“We have seen another interesting shift in the regions taking the top spots, with a more distinct North/South divide in Q1 with the North outperforming their Southern counterparts. Tenant demand continues to grow and fluctuate in certain areas of the country, at different times. So I suspect we will continue to see movement in the yield table in the months to come.”
