'Buy-to-let helps fill the housing gap'

News Category: Industry News

Landlords with buy-to-let properties continued to enjoy steady growth in the first half of 2007, new research suggests.

Data gathered by Paragon shows that annual rents in the UK were up 13 per cent in the first six months of the year - reaching £10,938 in June.

Equally, the value of the average house in a landlord's portfolio increased from £162,776 to £179,793 over the period - a rise of 10.5 per cent.

This means that typical yields for landlords have remained stable at 6 per cent for the past year.

"The private rented sector has expanded in response to a growing need for decent, affordable accommodation, especially in response to a dwindling supply of social housing," explained Nigel Terrington, chief executive of Paragon.

"Landlords stepped in to meet the demand from people needing flexibility in their choice of housing, as well as those who are deferring their decision to buy a home in an environment of rising interest rates.

"The latest rise in borrowing costs may cause some prospective homebuyers to stay in rented accommodation for longer - buy-to-let helps fill the housing gap."

Earlier this month, Birmingham Midshires also published figures which suggested landlords had enjoyed good returns on their properties over the last year.