Buy to let market 'set to grow in 2007'

03-Jan-2007

A mortgage lender predicts that the buy to let market has "excellent" prospects for growth this year, which could provide good news for first time buyers.

With increasing numbers of new landlords, including first time buyers, entering the market in 2006, the buy to let business saw a strong increase in activity which is expected to continue this quarter, claims Paragon Mortgages.

The financial service group also revealed that its lending to buy to let investors in 2006 increased by 82 per cent from 2005.

"Based on our latest buy to let index, the average buy to let investor made over £7,700 in 2006 just by owning a rental property, in capital appreciation alone," comments John Heron, managing director of Paragon Mortgages.

The spokesman added that the company's latest survey shows that many landlords expect these returns to rise in 2007, with a third predicting that they will increase their portfolio by six per cent during the next 12 months.

Meanwhile, a recent poll from Heritable Bank revealed that landlords believe the secret to success in the buy to let industry is obtaining strong legal advice.

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