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Long-term landlords boosted by rising renter demand
3 April 2008 10:30
Demand for rental accommodation has risen over the start of the year, according to new figures, with the buy-to-let sector proving particularly attractive to professional landlords.
The average annual rental income rose by 2.4 per cent in February to £11,604, Paragon's data showed, which was up by 15 per cent year-on-year, with the typical rental yield staying at 6.3 per cent, which is 0.3 per cent higher than it was three months previously.
Meanwhile, the price of the average buy-to-let property climbed by 1.5 per cent in February to £187,597, 10.9 per cent higher than it was a year ago, while, despite dipping slightly from 18 to 17 per cent, total annual returns remained at historically high levels.
It is also notable that the make-up of this market is weighted heavily in favour of large-scale landlords, with 13 per cent of investors holding at least 100 properties and this top stratum currently owns three quarters of all private rental accommodation in the UK.
Paragon's John Heron explained that this type of investor has a different outlook to smaller speculators, taking a long-term approach based on supply and demand and paying little heed to either the credit crunch or the downturn in the property market.
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