Rent revenue continues to exceed investment prices
(01 March 2007)

Buy-to-let landlords are remaining ahead of the property market thanks to higher rents and thus rising yields, it has been reported.

The Paragon Mortgages Buy-to-Let Index for February has shown that rents achievable rose by 2.5 per cent in January, compared to a 0.4 per cent increase in December.

Average rental income per year now totals just under £10,000 at £829 per month for the typical investor.

Once again, high growth areas such as London are thought to be responsible for the increase in yields.

"Demand from tenants is particularly strong in London and its hinterland. The capital sees the largest influx of inward migrants and continues to enjoy a buoyant economy notwithstanding the impact of rising inflation and borrowing costs," said managing director of Paragon Mortgages John Heron.

"At the same time, investors have been actively growing their portfolios in response to higher rents and rising yields," he added.

Buy-to-let mortgages are now at eight per cent as a proportion of total lending, a rise of seven per cent in seven years, according to the Council of Mortgage Lenders.