14 Dec

Buy to let returns hit 28-month high

Buy to let returns hit 28-month high

Annual returns for buy to let investors hit a 28-month high of 21 per cent this year, it has been revealed.

The return equated to an average yield of £34,500 over the course of the year, according to figures from buy to mortgage specialist Paragon.

John Herton, director of mortgages at Paragon, attributed the improvement in returns to increasing rental income, the continued strength of house prices and stable yields.

He said: "Both rents and property values have grown strongly over the past 12 months. Looking forward, we can expect further upward pressure on rents to continue as first-time buyers remain in rented accommodation for longer.

"Returns generated by landlords are very good and compare favourably with alternative investment classes."

The growth in rental yields is nonetheless deemed to be the key factor driving the rise in returns.

These were up six per over the last quarter and 17 per cent over the full year.

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