The first rental yield league table of 2012 has revealed that landlords in the north west have taken the top spot, achieving the highest average rental yield.
Research commissioned by specialist buy to let lender Paragon Mortgages, has shown a significant regional shift in the rental yields achieved by landlords.
In the first three months of the year those achieving the highest average yield were in the north west, generating a yield of 6.6%, an increase from 5.9% in the fourth quarter of 2011.
The northern regions dominated the top spots, with landlords in the north east achieving an average yield of 6.5%. Following in third place was the south west with a yield of 6.4% and the east of England with 6.3%.
Yields, a property’s annual rental income as a proportion of its current value, are an important factor for landlords when making a property purchase decision.
Independent researchers, BDRC Continental, worked with Paragon Mortgages to survey more than 500 landlords, some of which were Paragon Mortgages and Mortgage Trust customers, in the first quarter of 2012.
The overall average yield achieved by landlords in the first quarter was 6.2%, an increase on the fourth quarter of 2011 where the average yield was 5.9%. However, those Paragon landlord customers who took part in the survey reported a higher than market average yield of 7.3%.
‘The rental yield figure is important for landlords as it gives a good indication of how well a property, and in a wider sense, a portfolio is performing,’ said John Heron, director of Paragon Mortgages.
‘We have seen another interesting shift in the regions taking the top spots, with a more distinct north/south divide in the first quarter with the north outperforming their southern counterparts,’ he explained.
‘Tenant demand continues to grow and fluctuate in certain areas of the country, at different times. So I suspect we will continue to see movement in the yield table in the months to come,’ he added.