Investors 'tempted by buy-to-let'
News Category: Industry News
Published: 20-Feb-2009
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Business in the residential lettings sector is tempting investors towards buy-to-let mortgages, it has been suggested.
A report by the Times cited research from the Association of Residential Lettings Agents (Arla), which showed that rental yields are consistently above four per cent, higher than returns from many savings accounts.
Ian Potter, operations director at Arla, the UK's regulatory body for letting agents, said: "Our members are seeing investors tempted back into the buy-to-let market as rental yields offer a greater return than the banks."
His comments come after savers have been hit by plummeting interest rates since the onset of the credit crunch. The base rate has fallen from 5.5 per cent last January to a current level of one per cent.
But while some homebuyers were struggling with increased difficulties in securing mortgage finance amid the economic downturn, demand for lettings steadily increased.
Indeed, a study by estate agent Your Move reported that rental demand in December was 63 per cent up on the same month in 2007.
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