According to Paragon Bank, yields have strengthened since the summer of 2022. This solid performance has been driven by rapid rental price increases due to the supply-demand imbalance in the rental market, and a stabilisation of house prices due to inflation.
Russell Anderson, Mortgages Commercial Director at Paragon Bank, commented: “Yield performance has been improving over the past 18 months as house price inflation moderated, but the strong demand for rental property drove rental prices higher. We typically see higher yields achieved by more complex buy-to-let propositions, but strong yields can also be achieved on more basic property types, such as flats and terraced homes.
“This data is based on offers, so you would expect yield performance to be even better on existing property in landlords’ portfolios, which would have benefited from a longer period of both house price and rental value growth since acquisition. Yields are also only one part of the story; the landlord’s specific return on investment will be based on a number of factors, including how they have financed the property, capital gains and also any improvements they make.”
To learn more about West One, one of the top investment opportunities in the North West, enquire below.
