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Landlords receive over 16k return on rental property

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Landlords received an 9.7% annual return in the year to February on an average rental property as prices rose and void periods shrank, figures from LSL revealed.

This compares to 9% in January and 5.4% in February 2013 representing an average return of £16,029; £7,921 rental income and £8,108 capital gain.

David Brown, commercial director of LSL Property Services, said: “Landlords are experiencing a very good mix of total returns.

“Rents are rising steadily while property values are growing at a healthy pace.

“Moreover the cost of finance is at a record low.”

But the rise in house prices has held back the increase of gross yields on a typical rental property.

They remained at 5.2% in February, the same as January and fell slightly year-on-year by 0.1%.

Brown said if rental property prices continued to rise at the same pace as the last three months the average investor could expect to make an annual return of 15.3% over the next 12 months, equivalent to £26,400 per property.

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