Buy-to-let earnings up, figures show

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The average yield on a buy-to-let mortgage purchase has increased in the past month, figures show.

Paragon Mortgages Buy-to-let Index for March 2007 states that the average yield on a buy-to-let property in February was 6.1 per cent, an increase of 0.1 per cent over the previous month.

Figures portray a three-month period of stability prior to the increase, although year-on-year yields are down 0.4 per cent from February 2006.

John Heron, managing director of Paragon Mortgages, said: "The UK buy-to-let market can only grow on the back of the strong expansion in household numbers expected by the government."

He added that landlords "expect the value of their portfolios to rise by 4.8 per cent over the next 12 months".

Returns on buy-to-let property overall increased to their highest level since November, the research found.

Following a two per cent rise in February, the total return on investment is now thought to be about ten per cent.

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