Buy to let rental yields on the up

Research by Paragon Mortgages has stated that rental yields on buy to let property rose by 6.4% in May 2008. Their Buy-to-Let index indicates that rental incomes have risen by nearly 12% over the last year with property values going up by 7.5%.

Rising but to let rental income can be linked to both genuine increases in the rent payable along with a decrease in the investment property value, thus improving the overal percentage returned to the investor. We would also expect an increasing tenant demand as the lack of suitable mortgage funds and products stops first time buyers getting on to the property ladder.

Whilst falling property prices can unnerve homeowners, professional landlords and property investors see deals to be made, with investment properties getting cheaper to buy.