Average rents rise by 4%

Average rents have risen by 4% over the past quarter to more than £1,000 per month, according to buy-to-let lender Paragon.

Research from the lender found that a third of landlords reported that tenant demand is expanding rapidly, while a further 58% said it is strong and stable. Rental yields - the rental income expressed as a percentage of the property's value - have remained stable at 6.3% for the third consecutive month.

John Heron, director of mortgages at Paragon, said: "The backdrop for buy to let remains positive across the country - potential residential purchasers are reluctant to buy in the current market or are unable to secure a mortgage and this is fuelling extra demand for rented accommodation.

"The professional end of the market remains committed to buy to let over the long term. They typically hold their investments for a decade or more, they are not intending to sell following the Capital Gains Tax changes and they are not experiencing pressure on their finances as a result of the credit crunch, as they borrow an average of less than 40% of the value of their portfolios."