Rental Returns Two_Year High

Rental Returns Two-Year High

According to Paragon’s Buy-to-Let index, rental yields rose by 6.4 per cent in May, their highest level since the start of 2006.  Landlord’s rental incomes have increased steadily over the past year, rising nearly 12 per cent in the last 12 months and 6 per cent in the past 6 months.  Managing director of Paragon Mortgages, John Heron said, “Strong tenant demand has been pushing up rents, allowing landlords to achieve better yields than they have seen for more than two years.

Our view

This is simple maths.  If they have hit a high then they can only go one way.  Expect rental property values to increase again as more people re-enter the market.  This will then reduce the yield on your investment as rents will stay the same.

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