These stories about rising rental yields really irritate me. Today, Paragon Mortgages again claimed that rental yields have hit highest levels for more than two years, in its latest buy-to-let index.
The troubled lender announced that landlords’ rental incomes have risen nearly 12% in the past year and 6% during the past six months. Meanwhile, property values have risen 7.5% year-on-year, although by just 0.2% over the past six months.
So how does Paragon reconcile their double digit rental growth with the rental inflation data produced by the Office of National Statistics. Here is there chart, which shows that rental inflation is running at approximately the same rate as RPI inflation: