Buy-to-Let Yields Maintain Their 18-Month Growth Streak
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- 17/12/24
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- 4 min read
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- Sales
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Landlords across the UK are reaping the rewards of increasing buy-to-let yields, with the latest data from Paragon Bank confirming steady growth over the past 18 months.
Landlords across the UK are reaping the rewards of increasing buy-to-let yields, with the latest data from Paragon Bank confirming steady growth over the past 18 months.
During the third quarter of 2024, average buy-to-let yields reached 6.72%, up from 6.69% in Q2 and 6.48% a year earlier. These figures are based on an average buy-to-let property value of £343,356 and an annual rental income of £23,076.
What’s Driving the Increase in Yields?
The rise in yields is underpinned by stabilised house price inflation and increasing rents, driven by constrained rental stock availability. With demand for rental properties far exceeding supply, landlords are seeing opportunities for stronger returns on their investments.
Tunbridge Wells: A Strong Market for Buy-to-Let
The Tunbridge Wells property market remains robust, with average house prices at £470,000, well above the national average. Buy-to-let rental yields in the area currently range between 4.5% and 5.5% for traditional investments, such as flats and terraced homes.
For more experienced landlords seeking higher returns, properties such as Houses in Multiple Occupation (HMOs) in Tunbridge Wells can deliver yields exceeding 6.5%, making the area attractive for a range of investment strategies.
Property Types with the Best Yields
Landlords looking to optimise returns can benefit from understanding which property types yield the highest returns:
* HMOs: Average yield of **8.34%**
* Freehold blocks: Average yield of 6.66%
* Flats: Average yield of 6.02%
* Terraced houses: Average yield of 5.94%
Traditional property types like flats and terraced homes remain a popular choice, especially in high-demand areas near Tunbridge Wells town centre and key commuter routes.
Regional Trends in Buy-to-Let Yields
While Tunbridge Wells offers stable and appealing returns, it’s interesting to compare regional variations:
* North of England (North East and Cumbria): Highest yields at 8.02%
* Wales: 7.95%
* Greater London: Lowest yields at 5.52%
Though yields in the South East may not match those in the North, Tunbridge Wells provides a balance of strong tenant demand, market stability, and potential for long-term capital appreciation.
Expert Insights on Yield Performance
According to Russell Anderson, Commercial Director at Paragon Bank Mortgages:
“Yield performance has been improving over the past 18 months as house price inflation moderated, but the strong demand for rental property drove rental prices higher. While more complex buy-to-let propositions often achieve higher yields, strong returns are also possible with simpler property types like flats and terraced homes.”
Anderson adds that landlords with existing portfolios may achieve even better yields, benefiting from long-term growth in both property values and rental income.
Why Tunbridge Wells is an Excellent Choice for Landlords
Tunbridge Wells offers a compelling combination of stable returns, tenant demand, and growth potential. Whether you’re new to property investment or expanding your portfolio, the area has opportunities ranging from traditional flats and terraced homes to high-yield HMOs.
As local property experts serving Tunbridge Wells and the wider Kent & Sussex area, we’re here to guide you in making the most of your buy-to-let investments. Contact us today to discuss your goals and how we can help you achieve them.