Landlords reported an increase in rental yields during the second quarter of this year.
The Private Rented Sector Trends Survey, commissioned by specialist buy-to-let mortgage lender Paragon Mortgages, revealed that landlords achieved an average yield of 6.5%. This is an increase on Q1 where the average was 6.2%, and on the same time period last year where the average was also 6.2%.
Professional landlords achieved a higher average yield than the smaller-scale landlords surveyed, reaching 6.9% – an increase on 6.5% in Q1.
Landlords were asked for their views on current levels of tenant demand: just over half (55%) of landlords said that, for the moment at least, demand appears to be stabilising.
However, more than a third (36%) believe tenant demand is growing. Professional landlords are more likely to think that demand is increasing – 39% compared to 27% of smaller-scale landlords.
Looking ahead, 44% of landlords expect tenant demand to increase over the next 12 months.
One-fifth of landlords are on the investment trail, with 21% planning to purchase buy-to-let property in the third quarter of this year.
John Heron, managing director of Paragon Mortgages, said: “Strong tenant demand has continued to place upward pressure on rents and we have as a result seen yields strengthen despite the pressure on consumers.
“It is no surprise to see that more experienced landlords achieve better yields, with this being driven by their choice of property type and their approach to management.”