Yorkshire and Humberside Top the Rental Yield League

23/07/2012

In a recent survey, Yorkshire and Humberside jumps seven places to take top spot in rental yield league table.

A survey of 500 landlords, commissioned by Paragon Mortgages, working alongside independent researchers, BDRC Continental, has found that in the second quarter, Yorkshire and Humberside landlords had a higher average rental yield than anywhere else, topping the table with 6.8%.

This is a solid improvement from Q1, which saw Yorkshire and Humberside languishing in 8th place.

Wales was another high riser, leaping from 6th in Q1, with 6.0%, to a very close second in Q2, with 6.7%. Landlords in the South West showed more consistency, remaining rooted in 3rd place, with an average rental yield of 6.2%.

However, landlords in the Eastern regions did not perform as well, seeing a decline in the average yields their portfolios generated in the second quarter. Landlords in the East of England saw a yield of 5.7%, while the North East achieved a yield of 6.1%. The East Midlands took the wooden spoon, lying in 10th place – the bottom of the table – with 4.5%.

The nationwide average, covering all landlords surveyed, was the same in the second quarter as it was in the first – 6.2%. Interesting to note that professional landlords with property portfolios of 20 or more properties yet again achieved a higher than average yield of 7%.

Commenting on the results, John Heron, Managing Director of Paragon Mortgages, said, “The second quarter has remained largely static in terms of the rental yield that the majority of landlords are achieving. 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.

“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.”

See below for the full results:

Yorkshire and Humberside – 6.8%

Wales – 6.7%

South West – 6.2%

South East (exc London) – 6.2%

London (outer) – 6.2%

North East 6.1%

West Midlands – 6.0%

London (Central) 5.8%

East of England – 5.7%

East Midlands – 4.5%

 

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