Paragon Mortgages January 2005 buy-to-let index shows that landlords earned total annual returns of over 31 per cent in the year ending 31 December 2004. A rise of 11 per cent on the previous year.
John Heron, managing director of Paragon Mortgages, said: “Landlord rentals have generally risen strongly over the year. 2004 saw the highest figure ever recorded in the Paragon buy-to-let index at over £10,000.
“Uncertainty in the owner-occupier market has helped strengthen tenant demand as prospective buyers, many of whom are would-be first-time buyers, are unable or unwilling to make the initial leap onto the housing ladder.”
Meanwhile research from Landlord Mortgages revealed that experienced buy-to-let investors are so confident about long-term gains that if the property market were to fall in the short-term, 47 per cent would take the opportunity to buy further properties and 49 per cent would maintain their current portfolio with just 4 per cent saying they would sell up.
Lee Grandin, managing director of Landlord Mortgages, said: “It is interesting to see that the cliché of the ‘out to make a quick buck’ landlord is not representative of today’s buy-to-let investors.”
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However the Association of Residential Letting Agents (ARLA) has warned that the government attitude of ‘big nanny knows best’ is a danger to the market.
ARLA president Robert Jordan has warned that new regulations may result in a loss of property to the private rented sector that could lead to a spiral of inflationary rents.
Jordan said that the rules would cause significant inconvenience to landlords, tenants and buy-to-let investors: “Taken individually, the regulations appear like good ideas but taken together they become a nightmare and will drive landlords away,” he said.
