You are here: Home - News -

New Paragon index tracks buy-to-let yields

by:
  • 05/06/2003
  • 0
A new monthly buy-to-let index indicates the steady downward trend on yields has been reversed in t...

A new monthly buy-to-let index indicates the steady downward trend on yields has been reversed in the first quarter of this year. Paragon Mortgages research shows that average national yields rose to 7.99% last month, from a low in January of 7.91%. The highest yields are in Yorkshire and the North, at 9.83% and 9.82% respectively. The lowest yields are in the South, due mainly to high property prices. Greater London average yields are 6.95%, with the rest of the South East at 7.38%.

John Heron, managing director of Paragon Mortgages, said: ‘The rise of property values has meant we have seen a steady decline in rental yields over 2002, however, landlords have made a substantial capital gain on their investment properties over this time.’ He pointed out that landlords are currently able to make good deals with the cooling of the property boom. The average price paid for new purchases in March this year was £109,424.

Taking property value increases into account and despite lower yields, Greater London still gave the greatest overall return at 41.7% over the past year, followed by the East Midlands at 39.6%. Over the year, rental yields have held up nationally, rising 2.48%, and average annual rental income stands at £8,745.

The new index tracks yields, property values and rentals and is based on the lender’s data covering 18,000 buy-to-let mortgages annually. The figures are weighted by region and property type, but have no seasonal adjustment. Heron said: ‘The survey focuses on the two main variables landlords are concerned with, price paid and rent returned. The sample size for the survey is large compared to most surveys and there has been no similar survey since the Joseph Roundtree Foundation stopped collating figures two years ago.’

Paragon has also released the results of its Financial Adviser Confidence Tracking Index. It indicated a quarterly 14% fall in the number of mortgages signed, with remortgages accounting for 52% of all mortgages. However, adviser confidence remains high with introducers expecting a growth in business over the next quarter of 5.7%. Only 6.4% of advisers thought the contraction in the market would continue.


Tags

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
FSA proposes application fees

The Financial Services Authority (FSA) has published CP180, its proposed approach to application fee...

Close