North West landlords top yield charts

Paragon Mortgages says landlords in Yorkshire and Humberside have come top of the rental yield league table during the second quarter of 2012, achieving an average yield of 6.8%.

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.

They found that Yorkshire and Humberside landlords have reigned supreme this quarter having moved up the league from eighth place in the first quarter.

Meanwhile, landlords in Wales went from sixth position to second, and from a yield of 6.0% to 6.7%. However, landlords in the South West retained 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 the second quarter. Professional landlords with property portfolios of 20 or more properties continued to achieve a higher than average yield of 7% in the second quarter.

“The second quarter has remained largely static in terms of the rental yield that the majority of landlords are achieving,” said John Heron, managing director of Paragon Mortgages. “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.”

Heron added: “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.”

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