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Rents still on the rise, says Paragon poll

Rental incomes continued to rise in May for the third consecutive month, according to Paragon Mortgages&#39 monthly buy-to-let index.

The index shows that average rents rose to £9,953 in April from £9,651 in March, giving an 11 per cent increase over the past three months. This translates into an increase in landlord yields to 7.27 per cent in April from 7.22 per cent in March, which Paragon says is the highest level since December last year.

Paragon says that house price inflation on property bought by landlords has now overtaken the rate of increase in the housing market generally. It shows house price inflation on buy-to-let properties over the past three months is 10.3 per cent, while Halifax shows a 4.1 per cent increase and Nationwide a 5.2 per cent increase.

April saw higher yields in six out of the 10 regions, with the North remaining the highest-yielding region at 8.73 per cent, and the South-east remaining at the bottom with 6.64 per cent.

Managing director John Heron says: “Landlords have been seeing steadily rising rental incomes since the beginning of the year, helped by good levels of tenant demand which is in part attributable to the ongoing impact of affordability constraints on first-time buyers. This is now feeding through into higher yields, which have risen for the last two consecutive months despite the fact that house prices continue to rise steadily in a robust housing market.”

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