Strong Tenant Demand leading to rising yields - 22.07.2009

Author: Steve Olejnik Posted on: 22 July 2009

As prices in the housing market remain low and with strong levels of tenant demand, yields in the private rented sector appear to be strengthening. Paragon’s research for Q2 show that average yields rose to 6.4% (up from 6.2% in Q1).

This is the second successive quarter that we have seen a rise in yields and whilst the return from savings accounts remain low, I can see this trend continuing. The regional headlines from the report are as follows: the Midlands achieved strongest yields at 7.4%; North East 6.8%; North West 6.7%; Wales 6%, Scotland 6%, South West 5.9% and South East 5.8%.

Landlords expect yields to continue to grow over the next year, which makes residential property an attractive investment. The challenge of course is the limited funding available for Buy to Let mortgages but there are deals available for the right property and borrower.

Author: Steve Olejnik