MortgagesApr 16 2014

Rental revival boosts buy-to-let prospects

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The owner of Derbyshire-based mortgage broker Middleton Finance said an increasing number of clients were looking to bolster their property portfolios, with others turning to buy-to-let investing for the first time as an alternative to pension saving.

He said: “There are plenty of buy-to-let mortgage products available, [they] offer investors more control and lots of people are looking to get involved.

“The market is very different in Derbyshire compared with London and the southeast, but house prices are rising and rental prices are holding up well.”

Research by LSL Property Services has found rental affordability is improving, which Mr Bailey said was another positive signal for buy-to-let investors.

LSL-owned receivers Templeton LPA revealed that cases of tenants severely behind on rent had fallen 35 per cent, or from 105,000 to 68,000, over the past 12 months.

Meanwhile, analysis of Office for National Statistics data by LSL revealed that household disposable incomes were rising for the first time since 2009, with projected rent rises in 2014 of 1.7 per cent eclipsed by an expected average earnings rise of 2.2 per cent.

Mr Bailey added: “Void periods are a lot fewer than a few years ago, as are arrears, and this is all contributing to a good investment opportunity.

“Investors are also doing their homework to identify good-quality tenants. These statistics can only help make it an even more secure investment.”

David Brown, commercial director of LSL Property Services, said: “The incentive for investment in the private rented sector is growing on the back of solid rental yields and gathering capital accumulation. Now, lower risk is proving to be the cherry on top for potential investors.”

Adviser view

Mark Dyason, managing director of Scotland-based broker Edinburgh Mortgage Advice, said: “Buy-to-let continues to be an area of growth for us, despite the return of first-time-buyers to the market.”