16:26 PM, 10th January 2012, About 12 years ago
Landlords are expecting another bumper for year of buy to let, according to research by a property investment lender.
Just over half (56%) of landlords predict demand from tenants will continue to stay high.Few expect the private rental market to shrink – only 6% of landlords feel tenant demand will drop and hardly any (2%) expect rents to decrease, say the findings from Paragon Mortgages.
Most landlords are predicting tenants will have to pay rising (45%) or steady (53%) rents.
Around two-thirds believe rent arrears will stay about the same, but one in five fear they may rise.
Paragon chief executive Nigel Terrington said: “It is no surprise that landlords are expecting a healthy level of tenant demand based on the levels of demand we have seen steadily increase throughout the past 12 months.
“2011 was certainly a good year for the buy-to-let market, with not only increasing tenant demand but landlords investing in their portfolios, low levels of arrears and more available finance.
“With the success of 2011 to build on, I believe the private rented sector will continue to perform and provide a valuable tenure choice for even more people in 2012.”
In general, more buy to let mortgage lenders are making funds available for landlords – mainly because the chance to charge higher interest rates increases their margins.
Many lenders have switched funds from residential mortgages to buy to let because the returns are better.
Meanwhile, mortgage application data from brokers working for estate agents haart revealed applications have increased by more than a fifth in the past 12 months – the highest rise since the firm began offering mortgages in 2001.
Buy to let purchase and remortgage applications added up to 18% of all applications.
The estate agents say they process 100 mortgage applications a day.
David Miles, Managing Director of haart Financial Services, said: “My message is simple – lenders have money to lend, so whether customers are looking to buy for the first time, or moving to a new home, or investing in property on a buy to let basis, there are solutions available to make that happen.”
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