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29 June 2006
A buoyant buy-to-let market has seen investment property prices rise by 7.7 per cent in the past year to reach an average price of £168,935 in May, a new report shows.
Landlords are continuing to purchase new properties as rents remain steady, with typical rental income on a property in May standing at £10,189, an increase of 0.8 per cent on the April figure.
Rental yields are higher in parts of the country with lower house prices, according to the report from Paragon Mortgages, with the east Midlands and the north-west the highest yielding regions at 6.6 per cent.
While Greater London has the lowest rental yield, it had the highest total return for capital, based on property value appreciation and rental income, at 36.3 per cent on a property purchased 12 months ago.
Paragon Mortgages predicts that the buy-to-let market will continue to grow over the next five to ten years on the back of a stable economy.
"Landlords are experiencing solid demand for rental properties as economic conditions remain sound and interest rates are stable," said John Heron, managing director of Paragon Mortgages.
"There is a long term structural shortage of good quality residential property in the UK, and demand for it is growing steadily."
If you are thinking of taking out a buy-to-let mortgage or any other type of mortgage, you will be credit checked. Order your credit report first and check it's up to date and accurate.
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