72% of buy-to-let investors still willing to buy

Monday, 8 October 2007 12:00 AM

Despite recent turmoil in international financial markets 72 per cent of buy-to-let investors still believe now to be a good time to purchase property.

This is according to new research released by UK property investment experts, Property for Life.

The figure is perhaps all the more surprising as 44 per cent of investors claim they are feeling the pinch of high interest rates.

"Confident as ever in the returns offered by the housing market, property investors are keen to continue to expand their portfolios, undeterred by the higher interest rates and the financial turbulence of the credit crunch," commented Property for Life managing director, David Austin.

"A high tenant demand is fuelling rental yields, offering strong capital returns for buy-to-let investors.

"Providing the base rate does not stray above six per cent, the buy-to-let market will remain buoyant as the majority of investors are looking for a long term solution and recognise that bricks and mortar remains unrivalled as an investment asset."

There is, however, division over what investors expect to happen to interest rates next, after the Bank of England decided to maintain rates at their present 5.75 per cent level last week.

Some 33.8 per cent of buy-to-let investors think rates are likely to increase whereas 41.5 per cent expect a decrease and 24.7 per cent expect interest rates to remain the same.

As many as 48 per cent of buy-to-let investors felt house prices were likely to increase in the coming 12 months.

This compares to 14 per cent who expect a fall and 38 per cent predicting price stability.

"The housing market continues to perform well and although some investors may be exercising increased caution for the rest of the year and new investors may postpone their first purchase, this will only be temporary," concluded Mr Austin.

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