Wales is buy-to-let hotspot

Wales is a leading buy-to-let property investment hotspot, figures out today reveal.

Buy-to-let mortgage specialist Paragon says in Wales rents, yields and total returns are outperforming that of almost all English regions, despite strong buy-to-let returns recorded across both regions.

In the last three months rents are up 33 per cent in the principality, and buy-to-let property prices have risen 18 per cent, Paragon finds.

This puts Wales in second position in terms of total returns, behind East Anglia, the regions generating 25.6 and 29 per cent returns respectively.

"Rents are rising strongly in Wales, but so are property values, although to a slightly lesser extent," commented John Heron, Paragon Mortgages managing director.

He continued: "With a positive economic backdrop underpinning growth in tenant demand, it is not surprising that Wales is the [England and Wales'] top performer in terms of yield, and the only region to generate average rental yields in excess of eight per cent."

Paul Rockett, managing director of Cardiff-based company TBMC added: "Following the successful redevelopment of Cardiff, from the Bay area outwards, we're now seeing regeneration spread to other towns in south Wales, such as Swansea and Newport.

"Many international companies have moved into the Principality and this creates additional demand for homes, particularly for rented accommodation among younger workers who can't or don't want to buy for the time being, or foreign employees who may be here on a short term contract."

According to calculations from Paragon, a landlord who invested in a buy-to-let property in Wales this time last year will have achieved almost twice the national average total return.

Paragon: Buy-to-let annual investment returns by region
East Anglia - 29.0%
Wales - 25.6%
North - 23.9%
South-east - 18.1%
South-west - 13.9%
Greater London - 8.8%
Yorkshire - 7.6%
West Midlands - 6.3%
North-west - 5.1%
East Midlands - 2.6%