The research from Landlord Mortgages shows yields in England hit an all time low of 5.69 per cent in Q2, and London isnt far behind with an average rental yield of just 5.70 per cent.
This record low can be partially attributed to landlords keeping rents stable to retain reliable long-term tenants while house prices have continued to rise.
Another contributing factor is the significant increase in the level of remortgaged businesses.
In Q2, Landlords took advantage of the excellent remortgage deals to refinance their properties so they would need lower levels of rental income to cover payments.
Lee Grandin, managing director, Landlord Mortgages, said: In this competitive climate, landlords are sacrificing increased rental income to retain reliable long-term tenants. This decision is made easier by the recent prevalence of excellent remortgage deals.
At Landlord Mortgages, we have seen an 80 per cent increase in the level of remortgage business as landlords flock to refinance their properties and reduce the level of rent required.
Scotland continues to record higher rental yields than south of the border, displaying only a slight decline to 6.48 per cent from 6.58 per cent in Q1.
Despite this decline, year on year the figures show no real change in rental yields, illustrating a new found stability in the Scottish rental market place.
Grandin said: The Scottish market appears to be less volatile than previously as its peaks and troughs are becoming smaller. This is great news for investors looking for long-term stability in this market.
Over the next few months, we will be watching rental yields in the Capital closely. England generally mirrors the changes we see in London yields so any signs of a pick up in yields in this area will no doubt signal the same for the rest of the country.
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