2 Jan

Buy to let 'set for continued growth in 2008'

Buy to let 'set for continued growth in 2008'

The buy to let sector will see further growth next year as tenant demand rises, it has been predicted.

According to data from Paragon Mortgages, the buy to let market is set to expand by three per cent next year.

This will take it from the 12 per cent of all new mortgages approved in 2007 to 15 per cent, managing director of Paragon Mortgages John Heron claims.

Meanwhile, yields will rise to around 6.5 per cent, as fewer people opt to buy homes in the face of economic uncertainty, Mr Heron said.

"We expect 2008 to be a really strong year for rental demand, presenting plenty of opportunities for established buy-to-let landlords as well as well briefed new entrants to the market.

"The key factor will be a lower level of confidence elsewhere in the market, which will drive tenant demand higher while house prices - the cost of a landlord’s raw material - will at best be flat," he explained.

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