Buy to let property 'growing in value'

25 May 2010

Written by Jeni Browne.

The average value of buy to let landlord's portfolio has increased by 6.1 per cent in the opening three months of the year, compared to 4.2 per cent at the same point last year, research from lender Paragon Mortgages has found.

Growth in UK house prices drove the worth of the average buy to let property portfolio up to £1.52 million by the end of the first quarter of 2010, the mortgage provider said, marking the first time the market has seen increases for two consecutive quarters since 2008.

Paragon commented that the figure suggests rental home owners have both added to their assets and replaced some with properties of a higher value.

"Confidence amongst the landlord community has grown in recent months and that is reflected in portfolio valuations," Paragon Mortgages' managing director John Heron commented, referring to a survey by the National Landlords Association (NLA) that found landlord optimism to be at its highest level since 2007, with 28 per cent expecting to see better market conditions in the next three months.

Paragon's research results are consistent with the findings of the NLA, reporting that respondents predict the average value of portfolios will rise 1.2 per cent by the end of March next year.

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