Southern rents keep climbing
Investor landlords in Greater London and the South East see rising returns on rental properties for third month in row.
12:16 21 June 2004
Investor landlords in Greater London and the South East have seen rising returns on their rental properties for the third month in a row.
This is according to the June edition of Paragon Mortgages' Buy-to-Let Index.
Traditionally, these areas have offered lower yields on rental properties, as higher property prices are not matched by higher rents.
In comparison however, places like the Midlands and the North are able to offer higher yields.
However, so far this year yields in the capital have risen from 6.42 per cent in February, to 6.73 in March, 6.9 in April, and 6.95 per cent in May.
Meanwhile, in the South East they have risen more modestly, from 6.45 per cent in February, to 6.66 per cent in May.
Paragon Mortgages' managing director, John Heron, said: "Over the past few months, we've seen some firming of yields in those parts of the country where they have tended to be consistently lower."
The average price for a rental property in London has fallen from 237,950 in March to May's lower figure of 229,899.
There are also signs this month that the nationwide surge in landlord property values has started to stabilise.
Prices paid by residential property investors are now only fractionally up by 0.10 per cent this month.
Mr Heron commented on this figure saying the rise was "the equivalent of just over 100 on a property worth 137,000."
Year-on-year, the rate of increase of landlord property values has also declined, from over 25 per cent in April to 22.7 per cent in May.