Landlords look again at buy-to-let market

Increases in the cost of borrowing may force a number of landlords to reconsider their position.

16:40 07 May 2004

Increases in the cost of borrowing may force a number of landlords to reconsider their position.

Since 1998 the number of buy-to-let mortgages has increased by over 50 per cent each year.

There has not been a significant rise in the number of homes for rent during this period, but the number of small-scale landlords has increased.

In Scotland there have been indications that many of the new amateur investors have offered properties for let which struggle to find tenants.

Ronnie Carpenter, managing director of CIB Properties, told the BBC: "The market for the last two years has definitely suffered from oversupply.

"There's a lot more empty houses and the rents have almost gone into reverse."

While Mr Carpenter believes that most landlords will be able to absorb higher interest rates, he says there are three different groups of property owner in the rental market and each will be affected differently.

He said: "There are people who see it as a business, maybe self-employed people who've done well and see it as another wing to their portfolio.

"Then there are younger people who see no future in pensions.

"At the other end people who are in their 50s, 60s, who have invested wisely over the years, now they're buying a flat to let out as a good means of a pension."