Bradford and Bingley: Buy-to-let remains sound

Thursday, 13 December 2007 12:00 AM

Confidence remains high in the buy-to-let sector despite growing fears of a slowdown in the UK property market.

While evidence from Nationwide, Halifax and Rics show a moderation in house prices, professional investors remain upbeat about the future of the market.

Up to 86 per cent of landlords plan to either increase their portfolio or leave it untouched in 2008, according to Bradford and Bingley.

Furthermore, around 95 per cent are confident present rental yields of around 5.72 per cent can be maintained.

"Over half of our landlords report they have added to their portfolio this year which is extremely encouraging and indicates the prospects for the sector remain positive in 2008," said Jeremy Law, head of buy-to-let, Bradford & Bingley.

"Their views are the most authoritative in the industry as they are expressed by those who are at the coalface of the buy-to-let market.

"These are the people on the ground who are researching their areas, taking out the mortgages, buying, maintaining the properties and managing the tenants, therefore their opinions are important."

The UK property market is supported by strong fundamentals such as a healthy economy, rising employment levels and high tenant demand - all of which encourage investment, according to Bradford and Bingley.

Bradford and Bingley's findings are supported by those of Property for Life, who released research this week arguing 75 per cent of buy-to-let investors were looking to make a further purchase.

"The property market must be viewed as an ongoing cycle and there are opportunities for serious investors at every stage of the cycle," said David Austin, managing director of Property for Life.

"Although it is undeniable that lenders' appetite and ability to lend has tightened, seasoned investors with their knowledge of the market, long-term outlook and substantial equity base can capitalise on some great opportunities."

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