Research by Paragon Mortgages reveals that Yorkshire and Humberside landlords have reigned supreme this quarter having moved up the league from eighth place in Q1.
The regional spread at the top of the table is diverse with landlords in Wales moving from sixth position to second, and from a yield of 6.0% to 6.7%. However, landlords in the South West have stayed put, retaining their third place position with an average yield of 6.2%.
Landlords in other Eastern regions saw a slight decline in the average yields their portfolios generated in the second quarter, with landlords in the North East achieving a 6.1% yield and in the East of England a yield of 5.7%.
The average yield achieved by all landlords remained at 6.2% in Q2. Professional landlords with property portfolios of 20 or more properties continued to achieve a higher than average yield of 7% in Q2.
John Heron, managing director of Paragon Mortgages, said: “The second quarter has remained largely static in terms of the rental yield that the majority of landlords are achieving. However, to achieve an average yield of between 5% - 7% is extremely healthy and shows that portfolios are performing well.
“The demand for private rented property has continued to dominate headlines over the past quarter as we see the housing market squeezed further.
“It should be noted that the gross yield is calculated from the annual rent as percentage of the property value. Landlords need to look at a mix of returns from rental income and house price appreciation. Property maintenance and management should also be factored in to get a clear picture of the overall value a rental property investment.”
Independent researchers, BDRC Continental, worked with Paragon Mortgages to survey more than 500 landlords – some of which were Paragon Mortgages and Mortgage Trust customers – in the second quarter of 2012.
