Landlords earning 6.4% yields

| July 16, 2009 | 0 Comments
Landlords earning 6.4% yields

The average yields earned by landlords increased to 6.4% in the second quarter, up from 6.2% in the first quarter, according to figures released by Paragon.

This is the second consecutive quarter that yields have increased, after a prolonged period of stagnation.

Yields - a property’s rental income as a percentage of its capital value - are strongest in the Midlands at 7.4%, followed by the north-east a 6.8% and the north-west at 6.7%.

Wales (6%), Scotland (6%), the south-west (5.9%) and the south-east (5.8%) fared below average.

One in three (30%) landlords expect tenant demand to increase over the next 12 months, Paragon said, although one in five expect demand to curtail.

John Heron, Paragon managing director, said: “Landlords have enjoyed increased levels of tenant demand throughout 2008 and 2009 and it looks like that will continue into 2010.

“A lack of available mortgage finance makes it difficult for potential homeowners to purchase property and many people remain unwilling to commit to purchasing a home in the current house price environment.”

In related news, a study by Smartlandlord.co.uk found tenants are willing to pay up to 10% extra to rent from a celebrity.

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