22/06/2009 - More landlords increasing portfolios
Research shows that buy-to-let landlords increased the number of properties they bought during the second quarter of the year as they looked to take advantage of house price falls and record low interest rates.
According to the Association of Residential Letting Agents (ARLA), 16% of investment landlords extended their property portfolios during the quarter, up from 8% during the first three months of the year.
ARLA has cited the rise as being due to house price falls and the Bank of England cutting the base rate from 5% to 0.5% between October and March.
It added that landlords were looking to invest cash in houses instead of savings accounts, which are currently paying record low returns.
As house prices have fallen and access to mortgages for buyers declined, rental yields increased as landlords looked to take advantage of the demand for rental properties.
Figures show that the yields landlords can make on houses increased to 5.1%, up from 4.8% during the first three months of the year, while annual rents are now the equivalent of 5% of a flat's value, up from 4.9%.
However, average rent prices have started to dip as "accidental" landlords looking to rent out homes they are unable to sell have flooded the market.
Copyright © Press Association 2009
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