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Buy-to-let booms as landlords reveal growth plans

Buy-to-let booms as landlords reveal growth plans

Category: Mortgages

Updated: 25/02/2013
First Published: 23/09/2011

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 It is now over 6 months old so the content may be out of date.

The recent boom in the buy-to-let market shows few signs of slowing after landlords revealed they plan to carry on buying properties next year.

According to Assetz, three quarters of buy-to-let investors intend to expand their portfolios in the next 12 months, with strong rental demand the main driver behind the plans.

High and rising rental values and the belief that prices are at or near the bottom were also cited as incentives for buy-to-let portfolio expansion.

Only 10% of investors believe now is a bad time to invest in UK buy to let, with the majority citing concerns about the economy as the main deterrent.

Elsewhere amongst the data, the rewards that landlords are currently reaping were also revealed.

Nearly half of those surveyed said they are currently achieving gross rental yields of more than 5.5%, with almost a fifth achieving 9% yields or higher.

"The buy-to-let market is booming with landlords returning in considerable numbers, encouraged by the excellent rental returns currently available as well as the prospect of long term capital growth if property prices continue to strengthen," said Stuart Law, chief executive of Assetz.

" UK residential property in the right locations is increasingly viewed as a safe haven, offering investors a long-term, low-risk investment for their cash."

At the same time, the high street banks have attributed a recent rise in their mortgage lending to the ongoing growth in the buy to let market.

According to the British Bankers' Association (BBA), banks approved 35,226 mortgages for house purchase last month, 4% higher than in July and 14% more than in August last year.

At the same time, the number of remortgage approvals climbed higher month-on-month and was up 10% on a year earlier.

"Reports suggest that mortgage activity may have been stimulated by some growth in the buy-to-let market," said BBA statistics director, David Dooks.

Despite the rise, Mr Dooks said paying down existing debt continued to dominate the lending figures.

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