BTL “stabilises” prices
August 30, 2007 by admin
Filed under News, News-Mortgages
Although borrowing costs are rising due to the five separate interest rate rises in the past year – which some say could lead to house market turbulence – the continuing strength of the buy-to-let market is providing much-needed stability.
That is the contention of Paragon, whose Buy-to-Let index for July was released today.
According to the index, rents have risen by just over three per cent over the past three months, boosting the annualised growth rate to 12 per cent.
This comes at a time in which the general housing market is widely recognised by analysts to be slowing.
Chief executive of Paragon Group Nigel Terrington, commenting on the new index, said: “Buy-to-let provides housing for young people, who otherwise would be forced to buy and be stretched beyond their means. It would result in dramatically higher levels of repossessions in the housing market.
“As owner occupiers are increasingly struggling under the weight of higher borrowing costs, buy-to-let landlords can provide accommodation for the growing number of young people who want a flexible lifestyle or who aren’t yet ready to step on the property ladder.”
Figures covering the first half of the year from the Council of Mortgage Lenders (CML) have also recently revealed that the buy-to-let market took up 12 per cent of total mortgages in Britain – a record amount.
