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Final setting on rental yield


Figures brought forward by the buy-to-let broker indicates that Scottish yields have decreased, figures dropping from 6.88% - 2006 to 5.99% 1st quarter of 2007.

Landlord Mortgages states that the distance between yields on newly purchased properties compared with remortgaged investments in London and England has been at the minimum.

Most buy-to-let investors buy a house in need of work needed within the property; they complete the work then remortgage the house for a higher value. Normally it causes the yields post-remortgage to decrease, where the renovations adds a large value and leaves the property rented more easier.

Managing director Lee Grandin, at Landlord Mortgages, spoke further: “Rental yields have continued their downward spiral this quarter – a trend evident since early 2003.

“This in itself is not necessarily bad news for investors as it can be attributed to healthy capital appreciation rather than falling rents. Indeed, we believe that we will see healthy rental growth in 2007 that may cause us to witness increases in rental yields later in the year.”

He added, “Investors really do need to avoid the new build trap and make sure that their investment provides them with the opportunity to add value.”

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