East of England landlords 'enjoy highest yields'

by Sarah Ashcroft

Property owners with rental agreements in the east of England are more likely to enjoy higher yields than their counterparts in western areas, new research has revealed.

The study, carried out by BDRC Continental and commissioned by Paragon Mortgages, highlighted proprietors in such regions are generating returns of 7.5 per cent, compared to the national average of 6.7 per cent recorded in the third quarter.

Welsh landlords maintained their second place position with yields of around 7.3 per cent, while those in the north-east and central London followed with 7.2 per cent and 7.1 per cent respectively.

Commenting on the figures, John Heron - managing director of Paragon Mortgages - said returns for property owners recorded over three-month period have been "very good" and remain around the level reported in the last 12 months. 

The study also revealed professional landlords with a property portfolio consisting of 20 or more properties have continued to generate adequate returns - with an average of 7.7 per cent between June and September.

However, Mr Heron warned optimistic property owners not to rely solely on yields to measure the success of their operations, with focus on the potential for house price appreciation and the outlook for tenant demand also recommended.

"We know from other research that we have carried out, that almost all landlords (91 per cent) think that tenant demand is either stable or growing and this looks set to continue as we head into the last quarter," he added.

The expert's comments were made after research carried out by the Mortgages for Business Complex Buy-to-Let Index revealed an increasing number of property owners are making the most of high demand in areas with suppressed prices.

According to the research, gross yields on homes during the third quarter of 2012 increased as a result of a drop in price and ongoing demand for dwellings.

  • Manage your buy-to-let portfolio with Property Portfolio Software: helps landlords track rental arrears, increase cash flow, pinpoint poor performing properties and much, much more...

Related articles

Published on: October 29, 2012

Did you like this article? Share it!

Tenancy Agreement - Unfurnished

Unfurnished tenancy agreement advert
  • Solicitor approved
  • Guidance notes in the document
  • PDF format
  • Download now

Read More

Property Management Software

Property management software advert

One-touch property accounts for tracking cash flow and rental payments, plus software for generating tenancy forms.

Read More