2012: Year of the Dragon, Year of Buy-to-Let

Published: 01/12/2011

As the Buy-to-Let market reaches similar activity rates to those of 2007, experts are predicting a rosy future for the industry.

Research by Paragon Mortgages revealed over a fifth of landlords (22%) are expecting to add to their property portfolios in 2012. The average landlord’s portfolio has already grown quarter on quarter - from 12 in Q2 to 13 in Q3 - and, as tenant demand remains high (those in the industry seeing at least 13 applicants for every rental property), it would appear the market will continue in this upward direction.

Richard Sexton is the Business Development Director at e.surv:

“In September and October, 10% of all our valuations were buy-to-let and that’s been growing all year, so I would expect it to be between 12% and 15% next year.”¹

Despite it being cheaper to buy than rent, renters remain stuck, unable to raise the necessary deposit required to get on the ladder. Whilst high LTVs remain in the minority, tenant demand will continue at this competitive rate.

John Heron is the Managing Director at Paragon Mortgages who conducted the research:

“This is an interesting time for the private rental sector, as landlords are experiencing very high levels of tenant demand as other areas of the housing market come under increasing strain.

“Looking at the year ahead, I am pleased to see that landlords are expecting to add to their portfolios, as there is no sign that tenant demand is going to slow in 2012. To ensure the PRS can withstand further demand, there needs to be increasing investment in PRS stock.”²

¹Mortgage Strategy (Nov 2011)
²Mortgage Solutions (Nov 2011)

Content correct at time of publication