You are here: Home - News -

London reports lowest rental yields in Q3

  • 07/12/2015
  • 0
London reports lowest rental yields in Q3
London saw some of the lowest rental yields in the third quarter of the year, figures from Paragon Mortgages show.

Outer London reported 4.8% of rental yields – the annual rental income as a percentage of property value – while Central parts of the capital saw yields of 5.2%, less than the national average of 5.6%.

The highest yields, 6.1%, were reported in Yorkshire and the Humber.

Out of the nearly 2,000 landlords surveyed, 17% reported yields between 3% and 4%, while one in 10 landlords earned 10% or more.

Despite the low rental yield figures, London had the second largest increase in levels of tenant demand, rising to 48% from 42% year-on-year.

Overall, two fifths of landlords reported increased tenant demands in the third quarter of this year.

On a regional basis, the East of England has seen the greatest increase at 52%, and the North East the lowest at 31%, however, the region saw a 23% increase compared to the same period last year. The national average was 41%.

John Heron, director of mortgages at Paragon, said the figures reflect a steadily improving economic outlook for the UK as a whole, and that yields have remained stable throughout the year.

“Q3’s data shows London and the South East slowing down somewhat, while yields in the regions are growing. This represents a welcome rebalancing of the national economy, with some of the heat from London’s economy escaping the M25 and being distributed around the country.”

Mortgage Solutions reported in July that landlords on average were earning less money per property in the first two quarters of 2015 with average drop between 0.6 to 1.6 percentage points across three different sectors of the market. The only sector to see yields increase was multi-unit freehold blocks, rising 0.8 percentage points.

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.


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.


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.


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.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
David Cameron
Government to remove barriers to shared ownership

The Prime Minister is set to announce an expansion of the government’s shared ownership scheme to allow an additional 175,000...