Returns on buy-to-let property rose last year, a new report reveals.

Figures from Birmingham Midshires show a 16.3 per cent rise in returns on buy-to-let properties in 2007, representing a rise from 13.5 per cent since the previous year.

The average price of a rental home in the UK increased by 10.9 per cent during the year, reaching £154,795, according to the report.

Meanwhile, a 5.4 per cent increase in rental yields has been recorded, with the average British rent rising from £617 a month in 2006 to £698 a month last year - a 13.1 per cent increase.

While buy-to-let investors in Northern Ireland are named as receiving the strongest gains, receiving total returns of 44.3 per cent, the financial services provider asserts that there is no part of the UK in which the average price of a buy-to-let property is below £100,000.

Price comparison website Moneyfacts notes that people who own property may be able to get larger loans by securing funds on their property.
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