Average rental yield remains high

Landlords achieved an average rental yield of 6.3% in 2012 research released by Paragon Mortgages has revealed.

The landlord survey which was carried out by BDRC Continental found that landlords achieved a consistent average yield throughout 2012 which peaked at 6.7% in Q3.

Landlords in the North East achieved the highest average yield in 2012 at 6.6% followed by landlords in the East of England with an average yield for the year of 6.5%.

The London rental market has remained strong throughout the past 12 months with tenant demand reaching new peaks in the capital.

The average yield achieved by landlords in London (central) in 2012 was 6.4%.

John Heron, director of mortgages at Paragon, said: “The average yield on residential property has remained consistent during 2012.

“Yields are a critical measure for landlords and would-be landlords in assessing the relative value of an investment in property.

“With returns on cash falling in recent months and continuing high demand for rented property it is not surprising that we are seeing an increase in activity from both new and existing landlords.”

Peter Lawrence at Lawrence Rand said: “Clearly achieving a strong yield is great importance to landlords and is achieved through a combination of rental income and occupation.

Avoiding voids and arrears is crucial and a well-managed and maintained property is more likely to attract a quality tenant and, in turn, generate a better return.”