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News: BTL returns rising

Thu, 10 May 07

New reports highlight increasing rent levels in the UK buy-to-let market, with landlords stating that rents have shown signs of rising over recent months...

A survey conducted by Paragon Mortgages reveals that nearly half of all landlords believe that achievable rent levels have increased over the past six months, while 51 per cent agree that rent levels are currently stable.

According to Paragon's latest buy-to-let index, average rental incomes have risen by 8.2 per cent during the last quarter and by 1.6 per cent last month. Experts highlight increased tenant demand arising from inward migration, students and single individuals.

"The economic environment as well as rising divorce rates, inward migration and an expanding student population, mean that an increasing number of people require rented accommodation, and this is driving rents up," commented Paragon Mortgages managing director John Heron.

"These changing social and demographic trends are influences that will continue to fuel the market over the long term."

Concern has been raised over the profitability of buy-to-let in light of anticipated interest rate rises and the end of fixed-rate mortgage deals.

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