Buy-to-let landlords remain confident

Wednesday, 10 May 2006 12:00 AM

Many buy-to-let landlords are planning to increase their portfolios of property, research shows.

They are optimistic about the prospects for investment in buy-to-let property, helped by a fall in rental arrears and the potential for capital growth.

And the introduction of the Housing Act, which includes new regulations for houses in multiple occupation and tenancy deposit schemes, does not appear to have sapped their appetite.

A survey by Bradford & Bingley reveals that 83 per cent of landlords are intending to increase or maintain their portfolios in the next six months.

Tenant demand is healthy, with the number of landlords experiencing rental arrears falling from 26 per cent to 19 per cent during this quarter, while more than half have experienced no void periods in the last six months.

For nearly half of landlords, capital growth is their main reason for investing, with 28 per cent looking to purchase in an 'up and coming area' to benefit from house prices rises.

"Buy-to-let ranks high in the popularity stakes for investors," said Bradford & Bingley's Andrew Moss.

"Landlords are benefiting from the continuing rise in property prices and rents mostly staying the same or increasing."

The survey of 2,700 landlords shows that many are looking to buy in an area which already has a thriving rental market, and this is the main reason why London and the south-east remain the most popular regions for investors.

Terraced houses are the most popular types of property, owned by 57 per cent of investors, followed by two-bedroom flats, which are owned by 49 per cent of landlords.

"Our research findings are clear, the buy-to-let market remains buoyant with high levels of confidence from landlords and sufficient demand from tenants to support this," Mr Moss added.

"The government's 'U-turn' on holding residential property within Sipp's and the introduction of the Housing Act have seemingly had little effect on confidence in the market. Landlords are taking the changes in their stride and see bricks and mortar as a sound long term investment, for capital growth or to fund retirement."

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