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Worth taking a mortgage out for buy-to-let property

Date: Thu, 21 Apr 2005

Rental income rose again last month, according to Paragon Mortgage's buy-to-let index.

During March the average rental yields rose from 6.8 per cent to 6.9 per cent, a figure that could urge more people to consider purchasing a buy-to-let property, especially as the number of mortgages aimed at second home buyers increases.

The index showed that terraced and detached properties offered landlords the highest yield, with terraced properties at 7.4 per cent and detached houses at 7.1 per cent, whilst semi-detached properties and flats showed slightly lower rental yields of 7.0 per cent and 6.4 per cent respectively.

"The rental market is awash with people in their twenties and thirties who are delaying their first home purchase and choosing to rent," said John Heron managing director of Paragon Mortgages.

"Due to sustained demand rental incomes have risen more rapidly than property values, which have in turn had a positive impact on rental yields."

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