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Is There a New Breed of Buy-to-Let Investors?

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Buy to Let  Council of Mortgage Lenders  Paul Smee  IPIN Global  Tim King  Felicity J. Lord 

Is There a New Breed of Buy-to-Let Investors?

By - Thursday 16 May 2013

It looks like there is a new breed of buy-to-let investor entering the market. Tim King, from London-based estate agency Felicity J. Lord, told the Daily Mail that the sector is no longer populated exclusively by the wealthy looking for high yield investments to boost their portfolio. "Buy-to-let investors were once wealthy investors using cheap credit," he said. "Now, they’re people in their 50s who have lost trust in banks and pension schemes and are looking for a decent return on their money."

It's not hard to see why buy-to-let has become a popular property investment option either, with an entire generation of renters emerging over recent years, unable to get a foot on the property ladder due to lending restrictions and high prices. Finding tenants has never been easier for landlords and it is only natural more people want to get a piece of the action, especially as traditional liquid assets fail to perform.

In sharp contrast, the buy-to-let sector is a veritable feast of opportunities. Figures from Countrywide have recently shown that average rents are rising in England, Scotland and Wales and have been for six consecutive months. Rents stood at an average of GBP 842 per month in April - a rise of 0.8 per cent year-on-year. Yields now stand at around 6.2 per cent across the country, although in London this percentage is generally lower due to high property prices.

It looks like lending is also becoming easier, with figures from the Council of Mortgage Lenders (CML) showing that gross mortgage lending in the buy-to-let sector totalled GBP 4.2 billion across 33,500 mortgages in Q1. This is significantly up from GBP 3.7 billion recorded in Q1 2012. While remortgaging accounts for a large proportion of this figure, CML is confident that the market is growing. Loan performance is also improving, making buy-to-let all the more attractive for middle-aged buyers looking for alternative income. CML director general Paul Smee said: "The buy-to-let mortgage market is performing well, against a backdrop of robust landlord - and tenant - demand for good quality rental property."

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