Professional Landlords See Rental Yields Increasing
Professional Landlords with Rent Guarantee Insurance See Greater Rental Yields
UK Landlords with Rent Guarantee insurance have reported an increase in rental yields during the second quarter of 2012.
The latest Private Rented Sector (PRS) Trends Survey, commissioned by specialist Buy-To-Let mortgage lender Paragon, has revealed that UK landlords achieved an average rental yield of 6.5%.
This is an increase of 0.3% from the 6.2% average observed in the first quarter of the year. The average for the same quarter last year was also 6.2%.
Professional landlords who use reputable landlord specialist providers for Tenant Referencing and Rent Guarantee insurance achieved a higher average yield than the smaller-scale landlords surveyed, reaching 6.9% – an increase on 6.5% in Q1.
Paragon asked landlords for their views on current levels of tenant demand:
- 55% said that, for the moment at least, tenant demand appears to be stabilising.
36% believe tenant demand is growing. - 39% of professional landlords are more likely to think that demand is increasing compared to 27% of smaller-scale landlords.
- 44% of landlords expect tenant demand to increase over the next 12 months.
- 21% of landlords are planning to purchase more Buy-To-Let property in the third quarter of this year.
John Heron, managing director of Paragon Mortgages, said: “Strong tenant demand has continued to place upward pressure on rents and we have as a result seen yields strengthen despite the pressure on consumers. It is no surprise to see that more experienced landlords achieve better yields, with this being driven by their choice of property type and their approach to management.”
Legal 4 Landlords spokesman Sim Sekhon said: “It is no surprise that professional landlords are able to observe greater rental yields from their Buy-To-Let property portfolios, over the smaller scale landlord because the professionals actively seek out specialist products and services to help them profit from property, such as those offered by Legal 4 Landlords. There are a multitude of specialist services offered to help every landlord and letting agent get more from each agreed let whilst keeping the tenant at the centre of the focus for each rental property”.
