Rental sector investment could rise, says Paragon

Posted: 31 Mar 2009 12:09:28 GMT

Experienced and first-time buy-to-let investors alike could soon decide to put their savings into the buy-to-let market as a result of the falling base rate.

High rental yields and low property prices could offer an attractive investment opportunity for potential buy-to-letters, the Paragon Private Rented Sector (PRS) Trends report suggests, while low interest repayments and low competition for property could add further incentives to buying.

"The expansion that the private rented sector needs is likely to come from existing landlords increasing their portfolios and new investors attracted to residential property because of the solid long-term returns," explained John Heron, managing director at Paragon.

Buying a property online could lead to extra savings for potential buy-to-let investors, as it could allow buyers and sellers to cut out expensive estate agents.

While many may be concerned about the falling value of property though, the fact that the average annual rental yield in the first quarter of 2009 was 6.2 per cent should be enough to convince many to make an investment.

Figures from the Association of Residential Lettings Agents also found that most landlords plan to hold their properties for a little over 16 years, meaning any falls in property value now could be recovered in the next decade or more.



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