Buy-to-let 'will expand' in 2008
The UK buy-to-let market is set to enjoy strong growth during the year ahead, one specialist lender has stated.
Paragon Mortgages is predicting that the market will represent 15 per cent of all new mortgages in 2008, driven primarily by unrelenting tenant demand.
The ongoing robustness of the buy-to-let market is further expected to improve rental incomes, strengthen yields and cut void periods across the sector.
Rental growth is expected to grow by around six per cent as the tightened mortgage market continues to keep first-time-buyers off the ladder, while yields are also expected to hover above the six per cent mark with dampened house price growth raising buy-to-let profit margins.
As John Heron, managing director of Paragon Mortgages, explained: "The key factor will be a lower level of confidence elsewhere in the market, which will drive tenant demand higher while house prices - the cost of a landlord's raw material - will at best be flat."
Halifax recently reported that just 300,000 first-time buyers entered the housing market last year - the lowest number since 1980.
Published 3rd January, 2008
© 2008 Estates IT Limited
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The UK buy-to-let market is set to enjoy strong growth during the year ahead, one specialist lender has stated.