Average Yields Increase to 6.7%

October 29th, 2012

Research commissioned by Paragon Mortgages and carried out by specialists BDRC Continental indicates the average yield landlords generate on their rental property portfolio has increased to 6.7% in Q3 compared with 6.2% in Q2.

The reasons for the improved returns are the combination of softening house prices and stable or increasing rents.

Landlords in the East of England that are generating the highest average yield at 7.5%.

Landlords in Wales maintained their second place position with an average yield of 7.3%, followed by the North East at 7.2% and London (central) with 7.1%.

A summary of average yields across the regions is provided below:

  • East of England – 7.5%
  • Wales – 7.3%
  • North East – 7.2%
  • London (central) – 7.1%
  • Yorkshire and Humberside – 6.9%
  • West Midlands 6.5%
  • South West – 6.2%
  • North West - 6.0%
  • London (outer) – 5.6%
  • East Midlands – 5.5%

One of the most interesting statistics that this report highlights is that professional landlords with 20 or more properties continued to generate a higher yield across their portfolios, reporting an average of 7.7%. Landlords with just one rental property achieved an average yield of 5.2%, and those with between two and four properties, 6.6%.