Paragon Mortgages - Buy to Let Index - October 2003
The main findings of the Paragon Mortgages Buy to Let Index were as follows:
Average rental yields rose slightly by 0.37% during September, following last month's small rise, to reach 7.60%.
Yields rose in southern parts of the country - South East +2.36%, Greater London +1.15%, South West +1.1% - narrowing the North-South divide a little.
Landlord property values rose for the sixth consecutive month to £125,246 - up 1.41% since August. The annual inflation rate has dipped slightly, but remains at almost 20%.
Rental incomes also rose by 1.79% to reach a new record high of £9,521.
Regions where property values are lowest continue to offer the highest yield. The North and North West have the lowest average property value (£56,140 - £80,351) but the highest yield (9.58% - 9.52%). The lowest yields are achieved in expensive areas for property - Greater London (6.79%) and the South East (7.12%).
The East Midlands offers the best total return (property appreciation plus rental income over 12 months) for landlords (and has done since August 2003), at 61.65%. The North West and the North continue to give the lowest total returns; the average total return is 28.49%.