Average total annual returns achieved by landlords rose in October, from 23.6% to 24.5%, according to data from Paragon Mortgages’ November Buy-to-Let Index. October saw a reversal of the downward trend in overall returns that began in August. An increase in property values across the majority of the country has contributed to a modest pick-up in overall returns made by landlords over the past 12 months. Investors are now making on average more than £31,000 gross on their buy-to-let properties
David Whittaker, managing director at Mortgages for Business says: “It is extremely encouraging to see an increase in landlord returns in October reversing the recent downward trend. This increase can be attributed to the confusion in the residential property market whereby would be first-time buyers may be putting their buying decisions on hold.”
According to the Paragon survey, investors are now making more that £31,000 gross on their buy-to-let properties. Landlords’ rental incomes have also risen by 2.5% over the past 12 months with yields also rising by 0.72% to 6.66%.
David Whittaker concludes: “As long as investors take a long term view of their residential property investments and hold them for a number of years the future of their investment remains rosy. As a long term investment residential property, despite its past cyclical nature, has always enjoyed substantial returns.”
