Buy-to-let investors had a very good year in 2006, as the value of rental properties grew even faster than overall house prices, the Council of Mortgage Lenders (CML) has revealed.
The aggregate value of all the buy-to-let mortgages taken out in 2006 was 57 per cent higher than in 2005, and 48 per cent more buy-to-let mortgages were taken out altogether, testifying to strong growth in the sector.
"Tenant demand is driving the market forward," commented the chief executive of Paragon Mortgages, Nigel Terrington.
And signs are strong for buy-to-let to "remain popular and successful", CML director-general Michael Coogan added, citing "evidence from other sources of strong tenant demand, rising rents and falling void periods".
But strong tenant demand also indicates that would-be homeowners are increasingly compelled to live in rental properties for longer than intended because of prohibitive house prices.
The latest CML figures show that 59 per cent of first-time buyers are now subject to stamp duty, which is imposed on any home worth more than £125,000 – up from 50 per cent when the last Budget was issued.
Meanwhile, Birmingham Midshires predicted that one fifth of people buying new homes in 2007 intended to let their properties.To learn more about buy-to-let mortgages, click here.
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