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Investor returns at 21 per cent
25 January, 2008
Market turbulence has boosted the rental sector with investors reaping annual returns three times greater than in 2006, Paragon has claimed.
The firm's buy-to-let index for January showed that rents have risen at their fastest rate on record, clocking up an 8 per cent increase in the last quarter of 2007 alone.
The fall in consumer confidence across the buying and selling markets has impacted positively on the rental sector.
As a result, tenants are now paying £965 per month on average - an jump from the £808 reported a year ago.
Yields held steady at 6 per cent for the five-months to December, however the final month of 2007 saw this figure boosted to 6.2 per cent.
John Heron, managing director of Paragon Mortgages, said: "Recent statistics provide solid evidence from the sharp end that landlords remain confident about the long-term prospects of residential property investment.
"Buy-to-let has certain counter-cyclical characteristics which mean it will remain resilient, and indeed will outperform the market, at times of lower economic confidence and growth.”