Modest growth expected for buy-to-let market

The trade body said increased buying and selling activity in the private rented sector during 2011 was not likely to be repeated in the coming months.

Arla said the number of landlords who sold a property in the past 12 months increased from 6 per cent to 8 per cent during the last three months of 2011.

It also noted an increase in the number of landlords who had bought properties, from 23 per cent to 25 per cent during the same period.

Arla said landlords in the northwest of England were particularly active, with 31 per cent of respondents buying at least one property during the year, and 11 per cent selling at least one.

However the number of landlords who expected to acquire further properties in the next 12 months fell from 27 per cent to 25 per cent, while the number saying they expected to sell rose from 8 per cent to 9 per cent.

Tim Hyatt, president of Arla, said: “Forecasts have stated that the rental sector will still offer growth in the coming year.

“Rental growth will remain robust across all sectors, albeit at a more sustainable level of around 4 per cent to 5 per cent for this year.

This will come about in part because of the continued inactivity in the sales market, but nothing like the growth we have seen for the past two years. However the private rental sector still represents substantial value for investors looking to enter the market or increase their participation.”

Ian Potter, operations manager for Arla, said: “A healthy private rental sector is crucial in providing choice and flexibility for consumers across the housing market in 2012 and, ultimately, helping to provide more homes for more people.”

Simon Collins, adviser for London-based mortgage specialist John Charcol, said: “We noticed a steady increase in the number of people inquiring about buy-to-let. So far it has held up massively well but this is a result of people looking to rent out their current homes.

“This is either because they are wanting to use their home for pension planning or because they want to move but are reluctant to sell at a reduced price.”