Could buy to let portfolios increase in value as property prices rise?

04 August 2010

Written by Jeni Browne

Buy to let investors may be interested to know that the cost of homes rose by 0.6 per cent in July, according to one organisation, which could see their portfolios rise in value.

The Halifax House Price Index showed that the worth of properties saw an increase of 4.9 per cent last month on an annual basis - found by comparing the average over the past three months to the same period the previous year.

An average home is now worth £167,425, while the number of mortgages approved - according to Bank of England figures - was up two per cent in the second quarter compared with the first three months of the year.

According to Halifax, an increase in home loan authorisations is one indicator of trends in property sales.

However, housing economist Martin Ellis commented that a mixture of rises and falls in house prices over the last seven months "is consistent with a slowing market."

The government's move to scrap Home Information Packs combined with a rise in the number of properties on the market "relieved much of the pressure that was driving up prices in 2009", he added.

In contrast to this data, research by Nationwide recently found that house prices fell by 0.5 per cent in July compared with June.

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