Buy-to-let optimism

Buy-to-let landlords are more confident than they have been for over a year, new research suggests.

13:54 05 October 2005

Buy-to-let landlords are more confident than they have been for over a year, new research suggests.

Research by Paragon Mortgages found that the average landlord expects a five per cent increase on annual growth, up from predictions of 2.5 per cent last year.

This represents the most positive projection for more than a year. Correspondingly the average portfolio is expected to expand from 11.8 properties to 12.2 over the next 12 months, with values rising from 1.45 million to 1.52 million.

"We're clearly now in a more buoyant phase for landlords. The market has proved more resilient than many people expected, and were definitely seeing a bounce back in buy-to-let," said managing director John Heron.

Increased demand from tenants has helped to swell the buy-to-let market, with landlords able to charge higher rents. Over a third of those surveyed said that they had increased rents in the last 12 months, with 21 per cent reporting that tenant demand had been growing.

The buy-to-let market is expected to expand further next April when new pension regulations come into force. New rules will count investment in property as investment in a pension fund and therefore make it eligible for tax breaks.