Buy-to-let grows, so does rent

The number of people taking out a mortgage for a buy-to-let property has remained constant despite a series of interest rate rises in the last year.

Some experts had predicted that as the cost of borrowing increased, landlords would shy away from increasing the number of properties they own.

However, figures from specialist lender Paragon show that they are continuing to increase their portfolios and simply charging increased rent to cover the costs.

In the last three months alone, the average rent charged on a buy-to-let property grew by 6.5 per cent.

“The market remains buoyant for both intermediaries and lenders, with good volumes of business for both property purchase and for refinancing of existing portfolios,” said John Heron, managing director of Paragon.

“Investors are encouraged by the strength of tenant demand, which enables them to increase rents on existing tenancies when they are renewed and apply a higher rent to new tenants than they would have charged three or six months ago.”

Almost a third of landlords said that they had increased rent due to rising borrowing costs.

Tags: economics, refinancing, cent."The market, demand, specialist lender, strength, year