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Buy-to-let applications increase

16th February 2012

More and more new people are keen to enter the private rented sector due to the current economic conditions in the British housing industry.

A new report from Paragon has found that the number of buy-to-let mortgage applications increased during the fourth quarter of 2011.

On average, agents saw an increase in business of 4.5 per cent, with buy-to-let deals now accounting for 23.3 per cent of mortgage activity – up from 19.3 per cent a year ago.

The Financial Adviser Confidence Tracking survey revealed that the number of first-time landlords increased from 19 per cent in the third quarter to 23 per cent.

Anyone entering the market for the first time may do well to heed the advice of the National Landlords Association (NLA).

The group warned that comprehensive landlord insurance was vital to those without experience.

A suitable policy such as freeholder insurance would financially protect property against a wide range of incidents including fire and flood damage.

The NLA stated that high yields can be an attractive proposition for many investors, but those who are the most professional with their tenants and property will reap the biggest rewards.

With this in mind, it may be no surprise that as well as a rise in the number of potential new landlords, the report also found that existing letting property owners are keen to expand their portfolios.

John Heron, managing direct of Paragon, said: "With record levels of rental demand being reported it is good to see that existing landlords are increasing the size of their portfolios, but it is particularly notable that the proportion of new landlords is also increasing.

"If these trends are maintained through early 2012 it would seem that the broad expectation of a further expansion of the buy-to-let market in 2012 is well founded."