Investors snapping up buy-to-let properties

Posted: 26 Apr 2006 09:27:10 GMT

The buy-to-let sector is continuing to perform well in the UK, while many investors benefited last month as the price of investment properties eased a little.

This has been attributed to sustained tenant demand for properties at the lower end of the market as well as a sudden surge in activity from small-scale investors.

Research from Paragon Mortgages indicates that after three months of prices rising, March witnessed a 1.5 per cent drop in the average price forked out by UK landlords, from £163,417 to £161,039.

Investors remain confident, however, with prices still 5.5 per cent higher than they were at the same time in 2005.

With prices easing slightly, rents are also marginally lower at £10,082 and yields now stand at around 6.26 per cent.

John Heron, managing director of Paragon Mortgages, has said that landlords typically approach buy-to-let investment with a ten-year strategy.

With this in mind, landlords remain convinced that a combination of rental income and capital appreciation will make the investment a lucrative option and experts predict the sector to remain strong into the future.

Mr Heron has observed that landlords are now showing particular enthusiasm in London, despite the fact that the capital traditionally offers lower yields.


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