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Conditions continue to favour buy-to-let
6 May 2008 10:30
The fundamentals of the buy-to-let market have remained strong, according to new figures, as demand for rented accommodation continues to boost landlords' returns.
Annual rental incomes stood at an average of £12,041 in March, Paragon's data showed, up by 1.3 per cent from February and 14.7 per cent year-on-year, while the average rental yield remained at 6.3 per cent for a third month in a row.
In contrast to the wider housing market, buy-to-let property values rose by two per cent in March to an average of £191,276, up by 11.3 per cent on the same month of 2007, with total returns also increasing from 17 per cent in February to 17.4 per cent.
Regionally, Greater London boasted the highest rental incomes and gross annual returns, at averages of £17,258 and £90,811 respectively, although landlords can obtain the best returns on their investments in the south-west, at an average of 33.7 per cent.
Paragon's John Heron noted that potential homebuyers' reluctance to purchase and inability to get mortgages were fuelling renter demand, while adding that professional landlords remain committed to the market and are were unfazed by the credit crunch.
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