Rental yields increase as demand remains high
Rental yields for landlords have increased across the country, new research suggests.
In its new 'Private Sector Trends Survey', buy-to-let lender Paragon Mortgages found that landlords have seen larger rental yields as a direct result of heightened tenant demand, yourmortgage.co.uk reports.
The report found that during the first quarter of 2012, landlords could achieve an average rental yield of 6.2 per cent on their properties. The figure was unchanged on figures reported during the previous quarter. During Q2, however, yields rose to 6.5 per cent.
For professional landlords, average rental yields rose from their previous figure of 6.5 per cent up to 6.9 per cent. The result given for the increases was sustained tenant demand, with 36 per cent claiming it has seen a rise in recent months. Fifty-five per cent conversely suggested that demand has remained largely stable.
Again there was a difference between different types of landlords, with 39 per cent of professionals claiming it had risen - compared to just 27 per cent of their smaller-time peers.
To capitalise on the increased demand, around one-fifth of landlords (21 per cent) said they would be building their portfolios over the coming months and will then look to advertise property immediately to secure higher yields.
"Strong tenant demand has continued to place upward pressure on rents and we have as a result seen yields strengthen despite pressure on consumers," managing director of Paragon Mortgages, John Heron, told rman.co.uk.
"It is no surprise to see that more experienced landlords achieve better yields, with this being driven by their choice of property type and their approach to management."