Rents have now increased for three consecutive months, rising from £9,524 in August to £10,337 in November, giving an 8.5% increase over the past three months. This increase in rents translated into an increase in landlord yields from 6.66% in October to 6.74% in November – the highest increase since March 2004.
John Heron, managing director of Paragon Mortgages, says: “Landlords have been seeing steadily rising rental incomes over the past three months, helped by good levels of tenant demand which is in part attributable to the ongoing impact of affordability constraints on first time buyers. This is now feeding through into higher yields, which have risen for the last two consecutive months, despite the fact that buy-to-let property prices have continued to rise steadily.”
