Growth on the cards for buy-to-let in 2008

News Category: Industry News

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Buy-to-let landlords can look forward to a successful 2008, according to new research published today (January 2nd).

Figures published by mortgage lender Paragon indicate the rental sector is set for growth this year, with strong levels of demand and a slowdown in house price increases both contributing to the positive outlook for buy-to-let landlords.

The lender identified terraced housing and apartments as being particular profitable options for any landlord looking to expand their residential lettings, while yields across the sector are expected to grow from six per cent to 6.5 per cent.

"We expect 2008 to be a really strong year for rental demand, presenting plenty of opportunities for established buy-to-let landlords as well as well briefed new entrants to the market," said John Heron, managing director of Paragon.

"The key factor will be a lower level of confidenceelsewhere in the market, which will drive tenant demand higher while house prices - the cost of a landlord's raw material - will at best be flat."

Research recently published by Alliance and Leicester revealed that 71 per cent of landlords are optimistic about their portfolio prospects this year.

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