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04 April 2006
The buy-to-let mortgage market is continuing to grow, reveals figures from Paragon Mortgages buy-to-let index.
Yields, rents and property values have all increased in February, with house prices increasing by 0.5 per cent over the period and investors seeing rents rise by 6.39 per cent.
"The beginning of 2005 was relatively slow, but activity picked up in the second half of last year and 2006 has seen momentum gather and investor confidence grow," commented John Heron, managing director of Paragon Mortgages.
"At Paragon we are seeing application flows significantly ahead of last year, with completions some 60 per cent higher than a year ago, and data from the Council of Mortgage Lenders (CML) shows that gross buy-to-let mortgage lending in H2 2005 reached a record high, of £14.6 billion, 47 per cent higher than in the previous six months."
An increase in tenant demand has contributed to rising rental income, which is good news for the sector, with the Royal Institution of Chartered Surveyors (Rics) recently reporting an increase in tenant demand of 24 per cent, says Paragon Mortgages.
Rents increased in seven out of ten regions, according to the research, with the largest increase being in the east Midlands, where rental income increased to £9,545 from £8,993 a month earlier.
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