Property investors 'need government support' - buy to let mortgages

15 July 2009

People with buy to let mortgages need more support from the government, according to new research from Paragon.

Figures compiled by the group during a panel-based survey of landlords indicated that during the second quarter of the year, average rental yields rose to 6.4 per cent, an increase from 6.2 per cent during the first three months of 2009.

However, John Heron, managing director of Paragon Mortgages, said that while government initiatives have helped encourage lending in the "mainstream" mortgage markets, "niche sectors" - including buy to let - also need support at the national level.

Mr Heron added that buy to let mortgages have an "important role" in the UK property market and suggested that investors may be increasingly attracted to the private rented sector amid "volatile" conditions in the stock market and "poor" returns from savings accounts.

Alan Clary, managing director of Exact Mortgage Experts, recently commented that investors have "faith" in the buy to let sector.

He made the statement after figures from the firm indicated 22 per cent of brokers feel that property represents the best asset class for long-term return on investment.

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