Buy To Let Updated:
Rising house prices have seen landlords enjoy a record 8.9% total return over the last twelve months, according to the latest Buy-to-Let Index from LSL Property Services.
While gross yields on a typical rental property remained steady in November at 5.3%, taking into account capital accumulation and void periods between tenants, total annual returns rose to 8.9% last month, up from 8.1% in October.
In absolute terms this represents an average return of £14,592, with rental income of £8,243 and capital gain of £6,349.
What is more, the lettings agent network has calculated that if rental property prices continue to rise at the same pace as over the last three months, the average buy-to-let investor in England and Wales could expect to make a total annual return of 10.5% over the next 12 months, equivalent to £17,294 per property.
Unsurprisingly, separate research from Paragon suggests optimism amongst landlords for the coming year remains at a record high, with a third expecting an increase in the net value of their portfolios.
"2013 has been a good year for buy-to-let and landlords certainly seem to be more active in the market. We have seen a steady increase in the levels of optimism among our landlord customers, and this looks set to stay in the New Year," said John Heron, director of mortgages at the buy-to-let lender.
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