According to research, 63 per cent of the average landlord’s portfolio was property based, while 28 per cent of new landlords chose BTL to have control over their investment.
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BTL has proved appealing not just because of the financial returns, but also for the investor to be less exposed to external market threats. Paragon reported that BTL loan advances were up to 82 per cent to the year ended September 2006, with one in every 10 BTL mortgages now provided by the lender.
John Heron, Paragon Group director of mortgages, said: “Landlords are choosing to invest in BTL because they are confident in the returns achievable. BTL is a popular investment option. Obviously every adviser would tell their client that the key to a good portfolio is to remain risk averse. Landlords are placing a slightly heavier weighting on the property aspects of their portfolios because they are confident in the returns that can be generated from BTL, more so than other investments in the market.
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“With recent volatility in the stock market, we have seen some investors increasingly looking towards investments over which they feel they have more control, such as buy-to-let.”
Rob Clifford, chief executive of Mortgageforce, commented: “BTL is still a hugely prosperous sector for those who want to take it seriously. Although there is a markdown in house prices due to inflation, there will be capital growth so it’s no surprise that there are new entrants in to BTL.”
