Buy-to-let 'in good health'

House price rises may be a blow for first-time buyers but for those with buy-to-let mortgages, things are looking up, recent research has revealed.

The slowdown of the UK housing market has seen a rise in the number of tenants demanding accommodation - which in turn, has seen rent charges rise.

According to specialist buy-to-let mortgage lender Paragon, those who have invested in property to rent out are predicted to increase the number of houses they own by five per cent over the next year.

The firm also revealed that the return on these properties is set to increase, with the average landlord portfolio predicted to be worth £1.5 million by September 2008.

Nigel Terrington, chief executive of Paragon, says: "There is broad agreement that buy-to-let is a beneficiary of a softer housing market, as would-be homebuyers defer house purchase and find themselves competing with migrants, students and first jobbers, among others, for a finite supply of rented homes.

"The private rented sector continues to expand steadily to meet this growth in demand for accommodation and landlords add to their portfolios in the knowledge that tenant demand is buoyant and rents continue to rise."

Confirming the figures gathered by Paragon was another buy-to let mortgage specialist, the Association of Residential Letting Agents, which today revealed that demand from tenant for housing has overtaken supply in all areas of the market - forcing rents up.

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