Rise in rental income to spur UK property investment?
More people may be tempted to invest in buy-to-let properties to capitalise on rising rental incomes.
Booming demand from tenants who have been priced out of the housing market has seen income from rent rise steadily over recent months.
And, according to new figures from buy-to-let mortgage provider Paragon, this trend is showing no signs of abating.
During the second quarter of 2011, almost a third of landlords (29 per cent) said that their rental income increased, says a survey by the company.
Among smaller scale landlords, 19 per cent reported rising rental incomes, while 32 per cent of professional landlords said they had seen an increase over the period.
Of those surveyed, eight per cent said that their rental income had risen by two per cent, with four per cent saying it had increased by more than six per cent.
Thirteen per cent of landlords said they had increased rental rates across their portfolios by between two per cent and four per cent - with four per cent saying they had made increases by up to six per cent.
Furthermore, many landlords expect this trend to continue at a similar pace for the near future, said Nigel Terrington, Paragon Group chief executive.
"Demand for privately rented property shows no sign of slowing down with four out of ten landlords (40 per cent) believing that tenant demand is either growing or 'booming', and will continue to do so for the next 12 months," he explained.
"Results from our latest research shows that rental income has increased steadily during the second quarter. Landlords are continuing to experience high levels of demand for their properties so have been able to make small increases to rent levels, without making accommodation unaffordable.
However, he added that it was important that finance for landlords becomes more readily available to allow them to meet growing demand.
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