Buy-to-let market 'primed for 2008'

The UK buy-to-let market looks set to enjoy a solid year in 2008 with rental demand showing no signs of slowing down, the Association of Residential Letting Agents (ARLA) has said.

Malcolm Harrison, spokesman for the association, said that a combination of factors had combined to produce favourable returns throughout 2007, even as the property slowdown began to take hold.

"Rental demands have been increasing for demographic reasons including the rise of single households, the need for flexible working and mobility, divorce rates [and] migration," he said.

Following a 2.8 per cent spike in total buy-to-let returns, Mr Harrison said the market was likely to enjoy another profitable year ahead and could expect to emerge virtually unscathed by any further interest rate cuts.

He said that most buy-to-let investors were savvy enough to negotiate sustainable rental yields from tenants, meaning that landlords "won't be too worried either way" if the base rate falls as expected.

Recent figures published by Birmingham Midshires show that average total returns for buy-to-let investors rose from 13.5 per in 2006 to 16.3 per cent last year.

News posted on 28th February, 2008