Buy-to-let investors are responsible for over a fifth of all mortgage brokers applications, according to Paragon Mortgages.
Paragon’s July Buy-to-Let Index also claims buy-to-let investors are seeking better value from property compared with residential purchasers and rising rents have allowed rental yield to remain stable despite recent interest rate hikes.
The report says around 21% of all mortgages dealt with by intermediaries are buy-to-let and the number of applications intermediaries are dealing with has increased, from 25 mortgages per office per month four months ago to 26.1 in July.
John Heron, managing director of Paragon Mortgages, says: “The consistently strong returns from buy-to-let continue to attract investors - a large proportion of these will be consulting financial advisers before taking the plunge and adviser confidence in the sector is at an all time high.”
The research also shows a 5% increase in average rents over the past 12 months. Much of the growth in rents has occurred in the last three months with a rise of 3.04%, according to Paragon. On an annualised basis, the past three months performance equates to growth of 12.7% per annum.
Landlords are also more likely to seek a good deal than residential buyers. The average price paid by a landlord has risen by 5.5% over the past year, while the average price in the residential market has risen 10.7%.
Heron adds: “Landlords are more experienced in negotiating down the price of a property than residential buyers and are also excellent at spotting those under-valued locations that will be the next ‘up-and-coming areas’.”
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