Landlord returns on the up

The total returns generated by landlords have reached their highest level in five months, according to the latest figures.

Rents rose by 8.2 per cent over the past quarter, while house prices paid by landlords have increased by 5.5 per cent during the same period, Paragon's buy-to-let index shows.

Total ungeared returns generated by landlords in March reached 12.9 per cent, compared with eight per cent in January and ten per cent in February.

The firm links recent growth in demand for rented homes with net inward immigration - which is increasing Britain's population by 500 people per day - claiming that most new arrivals choose the private rented sector for accommodation.

Paragon cited data from the Association of Residential Letting Agents which put annual rates of return for a residential rental property cash purchase at 11.2 per cent but stated that most investors gear their portfolio and fund it through a mix of cash and mortgages, which significantly increases the yield on money invested.

"The yield figures provide a one-off snapshot of the return to the investor at the point when he acquires a new property. However rents will grow over time, improving the landlords' inception yield," chief executive Nigel Terrington commented.

Recent Mintel figures indicated that the number of new buy-to-let mortgages sold is going to grow by 53 per cent by 2011.

Britons 'spend millions rectifying DIY disasters'

Britons have been warned to take care with their DIY projects after new figures revealed that 4.1 million households spend more than £670 million each year on rectifying home improvement disasters.

Homeowners in the Midlands proved to be the worst for this - spending £272 million a year repairing DIY damage - while Scots were the best, spending £4.6 million undoing their mistakes, the research from Halifax Home Insurance found.

Almost half (46 per cent) of households are planning to carry out work on their home, at an average of £13,800 per project and the insurer is warning homeowners not to carry out work they are not qualified for.

"Trying to tackle certain areas that you are not qualified for, such as electrics or plumbing, could invalidate your home insurance and leave you liable for the cost of any subsequent damage," commented senior manager of underwriting at the firm Vicky Emmott.

The insurer also found that 36 per cent of homeowners in the UK do not have buildings insurance and 22 per cent do not have contents insurance either, leaving them exposed if they should accidentally damage their home.

Research from Alliance & Leicester earlier this year revealed that large home improvements can add a substantial amount to a property's value, with a loft conversion thought to add £100,000 to a typical home.

Annual house price rises approach two-year high

The value of a typical home in England and Wales grew further in March, with house prices continuing "their recent strong run", according to official figures.

An average property in March cost 8.3 per cent more than a year earlier, with prices growing by one per cent during the month, Land Registry data shows.

This means that the average house price is £178,423, with all regions of the UK experiencing gains within the past 12 months.

Meanwhile, London witnessed a rate of property price rises that was more than three per cent per year larger than that of England and Wales as a whole, bringing the average cost for a home in Greater London up to £323,511.

By type, it was terraced houses that saw the largest price gains over the past 12 months of 9.2 per cent, followed by flats and maisonettes at 8.2 per cent.

"The data for this month shows one of the highest annual increases in almost two years," the Land Registry said.

It added that in March 2006, the annual change was 4.3 per cent, almost half of this year's March annual price increase.

According to the National Association of Estate Agents, additional house price inflation may be caused by a reduction in the supply of properties coming onto the market after the introduction of home information packs on June 1st.

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