New research from the UK’s biggest letting agent suggests that yields generated by new UK property investments have increased 4.7% since last year. However, there was found to be stark regional variation, with London and the South-East generating the lowest yields for landlords, despite having the highest rents in the country.
Also revealed was the increasing number of landlords who are purchasing properties with a tenant in situ, with the proportion of properties purchased with an existing tenant now at the highest level seen since 2005.
The findings come hot on the heels of the HomeLet Rental Index, which showed that buy-to-let property returns are rising at the fastest rate since 2008. All across the country, increasing numbers of people are requiring private rented property, as attested by the latest figures from the English Housing Survey, which showed that tenant demand is currently at an all-time high.
As a result, buy-to-let borrowing is booming. Paragon has just reported having increased lending to private landlords by almost two-thirds in the last six months. In addition to increased demand, the boost is also due to greater freedom retirees have been granted by the government reforms that now allow pensions to be accessed and spent on property.