(1888PressRelease)
July 05, 2007 - There was good news for people thinking of investing in the private residential rented sector this week as the results of a survey into rental yields were released. The findings of the Paragon study revealed that rents have continued an upward trend and have now risen for six consecutive months.
Nigel Terrington, chief executive of Paragon, commented: "The private rented sector is buoyant as demand from tenants continues to be strong."
"Many parts of the community, such as students, migrants, people on housing benefit, and first jobbers, rely on rented accommodation for their housing needs, and the sector is set to continue this growth over the next five to ten years."
Of the residential landlords and buy-to-let investors surveyed by the mortgage provider, most said that they were experiencing high demand for properties in their portfolio and reported average rental yields of six per cent. Paragon claims that the average annual rent stood at £10,702 if calculated by May prices.
This represents an increase of £1,037 on the annual rent that would have been produced on November averages, which was £9,665. Rental yields have kept pace with the rise in house prices, at a steady 6 per cent over the past 12 months.
More than 60 per cent of landlords operating in the private residential sector said that tenant demand was stable or growing. As a result a significant number were looking to expand their portfolio in the near future to take advantage of the increasing demand.
This prompted Mr Terrington to remark: "Commentators forecasting a downturn in the buy-to-let market have overlooked the fundamental dynamic of the UK housing market - people need somewhere to live, and for many house purchase is simply not an option."
However, he advised landlords and prospective investors not to throw caution to the wind on the back of the latest statistics. He pointed out that the traditional property buyer's mantra of "location, location" still applies, observing that "choosing the right property in the right area is key".
Mr Terrington conclude his company's report into the state of the buy-to-let market by criticising those market analysts who "indulge in scare stories about buy-to-let". He stated that no factors - economic or otherwise - can change the fact that millions of people need to rent their homes and advised investors and sceptics alike: "Like it or not, buy-to-let is here to stay and has a rosy future."
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