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Landlords thriving from rental boom

Landlords thriving from rental boom

Category: Mortgages

Updated: 28/09/2011
First Published: 28/09/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Landlords are benefiting from a booming rental market, with their income increasing for the third quarter in a row.

More than a third (34%) of landlords reported that they have increased their incomes from their property portfolios, figures from Paragon show.

Figures in July revealed that rents had risen above the £700 per month mark for the first time ever in the UK .

Just over 10% of landlords said their rental income had increased by between 2% and 4%, whilst 13% of landlords increased rents above that level.

Only 4% of the landlords surveyed said they had experienced a decrease in their rental income.

Almost four out of 10 (39%) professional landlords said their rental income had increased during quarter three, whilst 75% of smaller-scale landlords reported little change, with their rental income remaining the same.

"Tenant demand has been growing for a number of years, but in recent months it has accelerated considerably," said Nigel Terrington, chief executive of Paragon.

"With tenant demand only looking to increase further in the coming months, landlords are likely to continue to experience increases in their rental income, especially given that 49% of landlords said they expect demand to further increase in the next 12 months."

The rental sector has been boosted by a significant increase in the number of buy-to-let mortgages.

Product numbers hit a peak of 587 in July and finished August at 502, meaning the sector has almost doubled in size from the same point last year when there were 276 buy-to-let accounts.

In addition, today's Credit Conditions Survey from the Bank of England reported that there has been a sizeable pick up in demand for buy-to-let mortgages over the past three months.

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