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Buy-to-let landlords see rise in July returns after first-half dip

Returns for buy-to-let landlords on their initial investments rose in July after a dip in the first half of the year, according to Paragon Mortgage&#39s August index.

Average returns on initial investment rose from 24.7 per cent in June to 25.2 per cent in July. The increase follows significantly higher returns in a number of regions.

In the North, returns increased from 59.5 per cent to 72.4 per cent. In the West Midlands, returns increased from 25.4 per cent to 43.4 per cent while in the North-west, they rose from 19.2 per cent to 27.2 per cent.

The total annual return, which includes rents plus capital appreciation, is £30,128 up from £29,080. This figure consists of £21,073 in capital appreciation plus £9,055 in rental income on a property worth £119,587 at purchase.

Paragon Mortgages managing director John Heron says: “After a couple of months in which total ret-urns slipped, July saw a reversal of this trend, with an increase in property values across the majority of the country contributing to a modest pick-up in overall returns made by landlords over the past 12 months. Investors are now making on average more than £30,000 gross on their buy-to-let properties.”


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