New Year offers 'threats and opportunities' - buy to let mortgages

30 December 2008

The New Year will present both threats and opportunities for those with buy to let mortgages, it has been stated.

Rental demand in 2009 will be buoyed as people looking to buy a home will find it difficult to obtain finance and will rent instead, according to the Association of Residential Lettings Agents (Arla).

However, it noted that the increase in the amount homes put up to let - as they cannot be sold - will push rents down.

The body predicted that the housing market will return to its previous strong position by the end of the year and stressed that property is still a good area in which to invest.

Arla operations manager Ian Potter remarked: "Bricks and mortar are still the most solid long-term investment. This adage is particularly apt when considering the prospect of further falls in interest rates that will impinge on savings accounts."

It comes after the National Association of Estate Agents estimated that the sector will recover in 2009.