11 Nov

Landlords benefiting from strong demand

Landlords benefiting from strong demand

New figures show that UK landlords are enjoying a period of strong demand from tenants over the third quarter of 2014.

According to the latest Private Rented Sector Trends survey from lender Paragon Mortgages, 41 per cent of landlords believe that tenant interest was increasing, with 51 per cent saying demand had remained relatively stable.

Just three per cent felt there had been a decline in tenant interest and the data shows that confidence is high in the letting sector at the moment.

There was also a strong belief that rent arrears would remain stable, with just 12 per cent expecting them to increase and eight per cent predicting a fall in outstanding amounts.

Landlords looking to expand their property portfolios also explained that the rate of interest on buy-to-let loans remains their key deciding factor, followed by loan to value and product fees.

"Our latest survey of landlords reveals that that the past quarter has been a stable and steady one, with just over a third of landlords saying they feel more optimistic about the prospects for their rental portfolios," said John Heron, Paragon's director of mortgages.

"At this point in the year, we can usually gauge how the wider buy-to-let market has performed and what likely lending volumes for the calendar year will be," he added.

Mr Heron also predicted that total buy-to-let lending for 2014 will be around £25 billion - slightly higher than the Council of Mortgage Lenders figures for 2013, which showed a total of £20.7 billion.

However, estate agent Savills is predicting the possible introduction of a mansion tax could have a major impact on the UK housing market.

Research from the company suggests a mansion tax could negatively impact on growth by an average of five per cent over the next five years.

The so-called prime market, which refers to the top five to ten per cent of UK homes in terms of value, is already subjected to increased stamp duty, but the government is keen to control increasing property prices, especially in London.

"Two out of the main political parties still favour some form of mansion tax so owners and buyers will be rightly factoring it into their decisions as the election approaches," said Sophie Chick, senior research analyst as Savills.

She added: "It would take some time for the markets to accurately price in the impact of a mansion tax, but the threat of it has already slowed the market."ADNFCR-1222-ID-801759490-ADNFCR

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