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News: Landlords feel the pinch

Thu, 09 Aug 07

Rental yields continued to plummet in the second quarter of 2007, reports SaveBorrowSpend.co.uk...

If you’re struggling to get on the property ladder you can at least console yourself with a bit of schadenfreude today.  According to Landlord Mortgages, rental yields plummeted between April and June 2007 for the second quarter in a row.

New figures released by the buy-to-let broker reveal that gross yields on investment property in the capital fell to 5.38 per cent in the second quarter of 2007 from 5.99 per cent in the first.  To put that in perspective, you can generate a higher return by opening a savings account!

Lee Grandin, Director of Landlord Mortgages, did, however, reassure landlords that there was no need to panic: "These falling yields are not a sign of the buy-to-let market weakening, quite the opposite, as highlighted in the year-on-year growth of our lettings agency.”

"As landlords begin to increase their rents, in line with the value of the property, we expect to see rental yields pick up again - hopefully by the end of the year."

The Scottish rental market is also booming, with yields only dipping very slightly to 5.85%.

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