Buy to let property market picking up

23 April 2010

The buy to let property market is getting stronger, according to research conducted by the Paragon Group, an independent buy to let mortgage provider based in Solihull.

Renewed confidence in the sector has led one in ten landlords to say they are looking for property development finance to expand their portfolios this year.

The group's PRS Trends report shows that 2009 ended on a strong note for the buy to let market as the year saw arrears decline, tenant demand grow and rental incomes increase.

House prices increased by 4.2 per cent to £1.43 million in the final quarter of 2009 from £1.37 million in the third quarter. Over a fifth of landlords have said they expect to see their portfolios increase in value by the end of 2010.

A slow housing market, positive net migration and an increase in student numbers have seen tenant demand grow at the end of 2009 and one in three landlords expect this trend to continue through 2010.

The average yield has also increased to 6.2 per cent at the end of 2009 up from six per cent in quarter three.

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