MT reports buy-to-let upswing

Ramesh Sharma

March 18, 2006

Research conducted by Mortgage Trust revealed 58 per cent of BTL intermediaries expect rental incomes to increase in the second quarter of 2006, with 70 per cent of intermediaries also expecting property prices to rise over the next three months. The research went on to reveal remortgaging would be the main source of business during the second quarter of 2006, accounting for 45 per cent of expected business volumes.

Adding to property portfolios accounted for just over 40 per cent of expected business over the next three months, with loans to first-time landlords in the minority, accounting for less than 15 per cent of expected business.

Nicola Severn, marketing manager at Mortgage Trust, said the BTL market would be popular in 2006 for existing landlords looking to cement or increase their market share. She said: “Both our findings, and the figures released recently by the Council of Mortgage Lenders (CML), indicate there has been a definite upswing for the buy-to-let sector. Positive expectations for the housing market, recovering rental yields and stable interest rates have all contributed to bolstering confidence among both investors and their advisers. The trend for remortgaging indicates that investors are releasing equity for further investment. However while landlords are actively managing their portfolios to ensure maximum return on investment, the majority are cautious investors who believe in responsible borrowing and have very little desire to mortgage themselves beyond levels they feel comfortable with.”

Research conducted at The Homebuyer Show revealed similar optimism about the BTL market, reporting that 81 per cent of investors believe the BTL market would provide good returns. The independent research, commissioned by The Homebuyer Show, added that 68 per cent of investors are relying on the BTL market for their future wealth, with 72 per cent expecting to expand their portfolio in 2006.

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