"LONDON AND THE SOUTH EAST ON THE UP"

November 2005

According to October’s buy-to-let index from Paragon Mortgages, yields have risen in the South East by 0.8% and in Greater London by 0.1%. Out of the ten regions, South East and Greater London have consistently displayed the lowest yields due to higher property prices, yet yields have now risen in both regions on the back of higher rental incomes. Landlord yields in the South East and Greater London currently stand at 6.4% and 5.9% respectively says Paragon’s index.

Average rental incomes in the two regions rose in October to reach £10,549 in the South East and £16,908 in Greater London. Property values in Greater London currently average £288,490 and in the South East £165,721. Over the last twelve months rental incomes in Greater London have risen by 18.6% and by 6.5% in the South East. Over the same period property values in these regions rose by 21.2% and by 4.9% respectively.

John Heron, managing director of Paragon  says: “Due to sustained demand, rental incomes have risen more rapidly than property values in some areas, which have in turn had a positive impact on rental yields. The start of the new academic year typically results in a rise in tenant demand, especially in regions with large student populations like the South East and Greater London”. Across the remainder of the regions East Anglia, the South West and the West Midlands also saw increases in rental incomes.

Total Annual Return (rents plus 12 months capital appreciation)