Rental Yields Reach 10-Year High for Property Investment

Rental yields have hit their highest level in a decade, with landlords reporting an average yield of 6.3% in Q2 2024, according to Paragon’s PRS Trends Report. This marks a significant recovery from the 15-year low of 5.2% seen in early 2023.

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Growth in Buy-to-Let Returns

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The last time yields reached this level was in 2014, and they have steadily increased from early 2023. Richard Rowntree, Managing Director of Mortgages at Paragon Bank, highlighted the importance of this growth for the health of the buy-to-let sector.

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Portfolio Size and Structure Impact Rental Yields

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Larger portfolios of 11 or more properties yielded higher returns, averaging 6.9%. Landlords using limited company structures also reported yields of 6.9%, indicating the benefits of this approach in property investment.

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HMOs Lead with Highest Yields

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Houses in multiple occupation (HMOs) stood out, generating the highest average yields of 7.2%, making them an attractive option for buy-to-let investors.

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Optimistic Outlook for Buy-to-Let Investments

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With rental yields at a decade-high, property investors can expect strong returns, especially in HMOs and larger portfolios, making the buy-to-let market an appealing option for continued investment.

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Invest in UK Buy-To-Let Property to Capitalise on the Supply Demand Imbalance

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