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Buy to let booms in the North with top rental yields

The North/South divide is alive and well when it comes to the buy-to-let mortgage market, according to specialist lender Paragon Mortgages.

But it is the North which comes out on top in Paragon&#39s latest customer survey, showing the highest gross and net returns on residential investment property are found north of Watford.

Returns in the North are higher as a percentage of outlay and landlords can expand their property portfolios for less cash because of lower house prices, says Paragon.

The figures show buy-to-let borrowers in the North-west report gross returns of 14.6 per cent per property and in the North-east gross returns average 13.7 per cent.

Across Southern Britain, the average is only 10.8 per cent gross per property.

The highest net returns are in the North-west with 7.9 per cent in and the North-east with 7.7 per cent. In the South-east, the net return is 6.4 per cent and 5.8 per cent in the South-west.

Paragon managing director John Heron says: “The returns are higher than might have been expected in the North. This is probably due to the nature of our customer base. Many buy-to-let customers are increasing the size of their portfolios relatively quickly and are becoming professionals in the letting market.”

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