BTL pricing hit by eurozone

Fixed rates increased by an average of 0.21% during Q3 and the average tracker rate increased by 0.08% according to TBMC’s landlord profile tracking index.

The average rent in the UK also increased over the period. It rose to £1068.25, up £58.38 from Q2 2011. Average rental yield was 6.37%.

Commenting, Andy Young, chief executive at TBMC, said: “The observed rate increase is likely to be a result of continuing problems in the eurozone including the huge financial bailout to Greece. This in turn has affected the money markets and increased the price of funding.

“It is probable that product rates would have risen further had there not been increased competition amongst lenders in the Buy-to-let mortgage market.”

Young also added that the average expected rent had increased by over 30% in the past 12 months from £813.96 to £1068.25.

“This is very encouraging news for landlords and demonstrates the growing vitality of the buy-to-let market, as key drivers such as tenant demand remain strong.”