London isn't the UK's only hotbed of buy-to-let activity.

According to new research by specialist mortgage provider Paragon, the West Midlands is outperforming the capital in terms of rental income.

A survey of almost 600 landlords found that rental properties around Birmingham, Wolverhampton, Coventry and Worcester generate an average yield of 7.35 per cent, compared to 7.32 per cent in outer London and 7.07 per cent in the South-West.

The research also found that student lets are still delivering the best yield with an average yield of 7.62 per cent.

Houses in Multiple Occupation (HMOs) are still performing well with the average returning 7.56 per cent, while private family lets brought in 6.57 per cent, followed by migrant workers at 6.53 per cent.

Nigel Terrington, chief executive of Paragon, believes the rise in rental income for West Midlands-based landlords is due to the regeneration of Birmingham city centre bringing many workers into the area.

He stated: “The area is a hub for manufacturing, has a strong professional services sector, is home to several large universities and is undergoing significant redevelopment, so therefore attracts a healthy mix of tenant types.

"The yield a rental property generates is a hugely important part of a landlord's business plan, as they give a good indication of how well the property is performing and the level of income it is providing."

The latest buy-to-let index from LSL Property Services recently revealed that landlords in all areas of England and Wales saw an increase in their rental income in September.

The figures are the largest since records began with the average rent rising by 0.7 per cent to reach £718, exceeding the previous high of £713 set in August

Overall this represents a 4.3 per cent increase on the same period last year.

And Greg Kinnear of Landlord Assist has estimated that ongoing rises in living expenses will prohibit people's ability to buy property, driving the rental market up further.
 

London Rental Property News