19 Oct

Rental yields hit 15-month high

Rental yields hit 15-month high

Rental yields for buy to let landlords hit a 15-month high in September, new figures have shown.

Statistics from Paragon Mortgages show that total returns averaged 14.2 per cent during the month.

This compares with just 12.9 per cent six months ago, and 10.5 per cent for the same month last year.

Areas where tiled were highest were Greater London (25.1 per cent), East Anglia (24.5 per cent) and the North (20.6 per cent).

The growth in yields can be attributed to lenders tightening criteria, which in turn has discouraged prospective buyers form getting mortgages, Nigel Terrington, chief executive at Paragon said.

"The growth of the buy-to-let market has given [Britons] more options – before it was either live at home or buy a property, even if it meant you were financially stretched, and we saw the consequences of that in the early nineties with mass possessions," he said.

"Those people who would have been looking to purchase their first home in the current environment have the option of affordable and good quality rented accommodation instead."

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