Buy to let rental incomes rose 3.30 per cent (£9,354) in August compared to £9,055 in July according to Paragon Mortgages monthly buy to let index. The index also reveals that after two months of modest falls yields have now stabilised at 7.57 per cent as a result of this rise in rental income, despite the fact landlords are now paying over 10 per cent more for a property than 3 months ago and 20 per cent more than a year ago. The average buy to let property now costs the landlord investor £123,498 up from £119,587 in July.
Managing director John Heron says: “This month's strong increase in rents achieved provides evidence of sustained demand from tenants, at what is traditionally a busy time of the year for landlords as students and young renters sort out accommodation. While prices paid by landlords for properties are still rising strongly, the increase in rents has more than matched that rise, to reach the highest level we've ever seen. This has led to stable yields.”