Buy-to-let rents hit record high in October

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by Kay Murchie

According to lender Paragon’s latest buy-to-let index, average annual rents have reached record levels in the UK. Strong tenant demand for rented accommodation has resulted in average annual rents climbing to £11,066 in October.

This constitutes a 10% increase on the level of 2006 according to Paragon. Furthermore Paragon’s figures also show that yields remain steady at 6%, while total annual returns on the average property purchased a year ago have increased to 15.5% compared with 14.2% in September.

John Heron of Paragon said the figures suggested professional landlords were continuing to invest in property for which there is strong and sustainable tenant demand. Mr Heron added that there is solid and growing demand for decent, affordable rented homes in all parts of the country, but it is essential landlords purchase the type of property that meets tenants’ needs and expectations.

The group also said that rents are being supported by limited supply, with many prospective homebuyers putting off purchasing a home following reports of a slowdown in the property market, or a possible crash.

According to research from the National Landlords Association, 25% of landlords are looking to increase their property portfolio over the next few years.