Friday, May 01, 2009
Comedy Club opening act May 2009 - Para-gone
FT: BTL buyers buoyed by strengthening yields
Landlords experienced strengthening yields in the first quarter of 2009, prompting many to look to acquire residential investment property this year.According to Paragon Mortgages' latest Private Rented Sector Trends report, the average yield across landlords' portfolios rose in the first quarter to 6.2 per cent, up from 6.1 per cent in Q4 2008.
Overall, yields have been rising steadily since February 2008, when they stood at 5.7 per cent. As a result, one in five landlords said they intended to purchase residential investment property in 2009, while a further 28 per cent are undecided. Four out of five landlords who do plan to purchase property said lower prices in the current market were a key driver behind their decision.
Posted by jack c @ 10:10 AM (488 views) Add Comment
4 Comments
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1. mark wadsworth said...
"Strengthening yields"
I love it! What this means in practice is that capital values are falling even faster than rental income, hey presto, the return on capital goes up!!
2. denzil said...
Agreed! Difficult to deduce what Paragon are basing their figures on.
Yield on the amount borrowed would increase if you used falling LTV ratios, e.g yield on a BTL with a 100% mortgage is less than that on a 75% mortgage if Paragon used the mortgage to base their claims against.
1 in 5 landlords intending to buy property is hardly a statistic to get excited about.
3. maddison said...
The main thing that drives BTLers to keep their properties and take comfort in improving yields is there is just nothing else to put your money into. You would have lost MORE if you invested in - Commodities, Shares, Pension plans. Some companies that have seen good share prices recently have cut their dividend to zero. Another HUGE factor is many BTlers had tracker mortgages on interest only loans. Rents might be down but their costs have fallen signifcantly. There will always be exceptions like the people who went to inside track seminars.
4. Bajista said...
So 20% will buy, 28% might and over 50% definitely won't!