Buy-to-let 'will survive credit crunch'

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Buy-to-let landlords will continue to enjoy good returns even if the property market in the UK suffers a slowdown, an industry expert has said.

Malcolm Harrison, spokesperson for Arla, said that a slowdown in the housing market could actually help landlords and it would increase the demand for rental properties.

Indeed, recent figures from the Council of Mortgage Lenders (CML) indicated that, while mortgage applications by the public dropped in July, buy-to-let applications continued to perform strongly.

Mr Harrison explained that "a very high proportion of buy-to-let investors have taken out fixed mortgages", meaning that they were somewhat shielded from interest rate fluctuations.

"Buy-to-let is quite predictable - in that if there is a slow-down in house prices you know there is going to be more rental demand, and that always means the case of a thriving rental sector," he added.

Furthermore, Mr Harrison said that the ongoing 'credit crunch' was unlikely to hit landlords too severely because most "go to mortgage lenders with a well-thought out proposition, and that proposition generally includes quite a high deposit and conservative expectations of the rental value".

Recently, the Building Societies Association reported that many landlords were prepared to take a long-term view of their investments and not look to sell if house prices stalled.

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