Annual returns on buy-to-let investments have trebled during the course of 2007, according to Paragon Mortgages.
Increasing demand for rented properties is the main reason for growing rents, according to Paragon, which have increased rental yields and boosted total returns. Paragon’s January buy-to-let index reveals rents have risen by 19% during 2007, with exceptional growth of 8% in the final quarter. Tenants now pay an average rent of £965 per month, compared with £808 at the beginning of 2007. The rise in rents has brought rental yields up to 6.2%, after remaining stable at 6% for much of the year. As a result of these rises, coupled with rapidly growing property prices in the first half of 20...
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