View more on these topics

Rental yields rise in April, Paragon index reveals

Rental yields rose from 7.12% in March to 7.22% in April – reversing the downward drift seen over the past 6 months, Paragon&#39s April buy-to-let index reveals.

Paragon says the rise in yields occurred on the back of significantly higher rents achieved by landlords, which rose by 6.0% to £9,651 – a higher percentage than the growth in property values, which were up 4.5% this month.

John Heron, managing director of Paragon Mortgages, says: “With demand for rented accommodation from tenants steady or growing in many areas, landlords have been able to achieve higher rental yields, notwithstanding the continued rises in property values we&#39ve been seeing recently.”

After an increase of 3.0% in February, last month&#39s rise of 4.5% takes average property prices paid by landlords to £133,658 &#45 up by 8.3% over the past quarter, from December&#39s figure of £123,372.

The index shows that the highest overall return occurred in the East Midlands, where landlords have generated a return of 55.6% on a typical property bought 12 months ago, while Wales and East Anglia also produced returns in excess of 40%, 47.2% and 45.3%.

Rental incomes rose from £9,105 in February to £9,651 in March, an increase of 6.0%, and are 11.0% higher than the figure of £8,696 one year ago. Five out of 10 regions saw yields rising, with Greater London up from 6.42% to 6.73%, the South East up from 6.45% to 6.62%, the East Midlands up from 7.32% to 7.46%, East Anglia up from 7.15% to 7.27% and Yorkshire & Humberside up from 8.09% to 8.16%.

The North saw yields steady at 8.93%. Yields slipped in Wales to 7.46%, the North West to 8.33% and the West Midlands to 7.72% – with all the declines seen in lower than average yielding regions.

Paragon says the highest yielding regions continue to be the North and North West, which are also the regions with the lowest average house prices. The South East took over from Greater London as the part of the country with the lowest yield, although both regions saw healthy rises in yield, rising from 6.45% to 6.62% in the South East, and from 6.42% to 6.73% in Greater London.


Monty Burn announces retirement from broking

Mortgage Watchdog chairman Monty Burn has announced his retirement from broking and is to join Mortgage Strategy as a weekly columnist. Burn, a former MCCB compliance officer, says it is time for him to move on and take a less active role. He says: “I have taken Mortgage Watchdog as far as I can on […]

Fewer fraudsters targeting industry

The number of fraudsters targeting the mortgage lending industry has sharply declined, the CIFAS UK Identity Fraud Index reveals. The index, which is designed to show which business sectors are being worst hit by fraudsters and organised crime, is based on an average index figure of 100. A figure below 100 indicates that the sector […]

Exclusive: Enterprise appoints Paradigm Consulting

Enterprise Homeloans, the exclusive non-conforming mortgage packager for Zurich, hasappointed Paradigm Consulting to manage their marketing and PR. Michael Clapper, CEO of Enterprise says: “Enterprise is entering a new phase in thedevelopment of its proposition to Zurich&#39s intermediaries and having put the internal processesin place to provide a first class service, we are now turning […]

Serving more savvy and price-sensitive clients

Gary Lacey, group product manager, Norwich and Peterborough For well over a year the remortgage market has been extremely strong. Despite the recent drop in remortgaging the outlook for the market remains good as the likelihood of higher interest rates prompts borrowers to look for better deals. It is envisaged that Bank base rate could […]

Benefits - thumbnail

Global benefits predictions for 2015 from Jelf International

According to Doug Rice, managing director of international services, in 2015, managing their international duty of care will become an increasing focus for UK-based overseas organisations in both managing their short- and longer-term challenges. As a result, strong independent advice and innovative technological solutions will become more important than ever in managing their global benefits.


News and expert analysis straight to your inbox

Sign up