Nationwide’s figures showed house prices increased by 1.3 per cent in September, bringing the annual rate to 8.2 per cent.
Strong demand from landlords supported the market as tenant demand in the UK continued to rise. Large influxes of immigrant workers across the whole of the UK also helped the buy-to-let (BTL) mortgage market grow, the lender revealed. It also stated that typically younger households were choosing rented accommodation as a lifestyle choice.
While Nationwide Building Society’s Consumer Confidence Survey revealed that consumers expected house prices to increase over the next six months, the expected rate of increase was fairly modest and had fallen in recent months.
Commenting on the figures Fionnuala Earley, group economist at Nationwide, said: “BTL landlord demand looks to remain strong for some time to come. Around two-thirds of existing landlords have plans to extend their portfolios and many have access to finance from gearing their existing portfolios. Loan-to-value (LTV) ratios on BTL lending (including remortgaging) has drifted up since the start of 2005. In the first half of 2006 almost two-thirds of gross BTL lending was at a LTV ratio of 80 per cent or more, compared with only 41 per cent in the first half of 2005.”
Phil Perry, co-director at Ark Financial Planning Limited, said: “Property still seems to be the investment buzz word. I think people are finding the money to purchase property. We have had people with no money coming to us for a 100 per cent mortgage and taking a gamble that house prices will rise and that they will develop equity.”
