The inexorable rise of tenant demand is being met by landlords eager to join the housing sector, according to figures released by one of the UK’s leading buy-to-let mortgage providers.
Paragon, a mortgage providing company, revealed figures for the last quarter of 2010 showed that 21% of new mortgages taken out were in fact buy-to-let loans. The figure is the highest percentage achieved by buy-to-let purchases since 2007 and reflects both the current surge of confidence coursing through the letting sector and the miserable state of house sales.
It seems as though many landlords now feel the time is right to expand their business so long as they have the security of landlord insurance behind them. The continuing growth of mortgage providers offering new products is increasing competition and bringing more variety into the market, a point not missed by Paragons John Heron who said “It is forecast that nearly one in five households will live in privately rented accommodation by 2015, up from the current one in seven, and the sector will obviously require buy-to-let finance to facilitate that growth.
“The broker community is well placed to help landlords meet their finance needs. Buy-to-let is a commercial product and landlords appreciate the advice and support offered by the intermediary sector.
“The good news is that competition and innovation is slowly but surely returning to the buy-to-let market, and that is likely to continue throughout 2011.”
Not even the news that rental returns have slipped by 4% over the last couple of months seems to be deterring landlords from expanding their portfolios, perhaps the fact that void periods are quickly becoming a thing of the past is proving to be a bigger factor in their business plans.