Increase in private sector rental yields reported

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Increase in private sector rental yields reported

New research has shown that average yields in the rental sector increased to 6.4 per cent during the second quarter of 2009 - a rise from 6.2 per cent in the first quarter.

According to figures from Paragon, yields - or a property's rental income as a percentage of its capital value - have risen in the rental sector for the second consecutive quarter after remaining stagnant previously.

Landlords in the Midlands reported the strongest yields with 7.4 per cent, ahead of those in the north-east with 6.8 per cent and the north-west, which saw a 6.7 per cent rise.

"A lack of available mortgage finance makes it difficult for potential homeowners to purchase property and many people remain unwilling to commit to purchasing a home in the current house price environment," said Paragon Mortgages' managing director John Heron.

This news comes after the Royal Institute of Chartered Surveyors' latest housing market survey showed the first increase in price expectations in the housing market since May 2007.

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