Buy-to-let market 'growing despite interest rate rises'

Posted: 03 Apr 2007 11:58:06 GMT

The buy-to-let market is growing, despite the recent interest rate rises, according to new research.

The buy-to-let property market is growing, despite the recent interest rate rises, according to new research.

Paragon's latest buy-to-let index has shown a sustained growth in rents over the past quarter, with an increase of 6.9 per cent since November.

In February, rents rose faster than house prices, which had a positive impact on rental yields, according to the group.

Nigel Terrington, chief executive of Paragon, said: "Suggestions that buy-to-let activity is influenced by fluctuations in interest rates - with business going up when rates fall and going down when rates rise - is unfounded."

He added that the long-term dynamics of the private rented sector "remain sound", while landlords continue to generate strong returns and add to their portfolios.

Landlords' investment decisions are not based on short-term signals such as fluctuating interest rates, but on trends of supply and demand, the group claims.

Meanwhile, recent research from Birmingham Midshires found that over one in five new homes bought over the next 12 months will be purchased by investors, including buy-to-let investors, property developers and parents helping their children on to the property ladder.


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