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High tenant demand benefits buy-to-let investors

September 4, 2007 by admin  
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Confidence in the buy-to-let sector is sky-high, with landlords reporting an increase in average yields and plans to expand their portfolios.

A buy-to-let trends survey of landlords by Paragon shows that despite rising interest rates, landlords are more confident than ever in their property investments.

Paragon’s confidence index – which is based on the value of their property portfolios now and their expected value in twelve months’ time – is now standing at 160, up from 155 last quarter and from 150 a year ago.

John Heron, managing director of Paragon Mortgages, commented: “Landlords are confident because tenant demand is strongly underpinning the market.

“Young people are choosing to stay in rented accommodation for longer, while there are a growing number of students and immigrants who are fuelling demand for rented property.

“Just this week we have had data on record numbers of students and strong net immigration figures which indicate demand for private rented property will continue to rocket.”

High tenant demand has meant that landlords can up their rents, counteracting the squeeze from rising interest rates and higher house prices.

Slowing in the housing market has also been beneficial, with landlords taking advantage of the dip and building their portfolio, and many plan to continue to do so over the next year.

Tags: confidence index, tenant demand benefits, property, Paragon, landlords, confidence, private rented property, john heron

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