Britain's buy-to-let sector
has been experiencing a turnaround in fortunes of late, with landlords taking advantage of a drop in house values and low interest rates. The value of loans taken out by private landlords has increased by 22 per cent in the past year, data from the Council of Mortgage Lenders has revealed.
"Transactions are up, but buy-to-let landlords and cash investors are propping up the figures rather than owner - occupiers," Nick Leeming, business development director of property website Zoopla, told Bloomberg.
Indeed, this resurgence in the buy-to-let sector
has been sparked, in part, by the recent financial crisis. The economic troubles have played a role in making the investments appear more attractive, while the Bank of England's decision to keep its benchmark interest rate at a record low of 0.5 percent for 27 consecutive months has ensured costs remain down.
The news provider added that restrictions on mortgage lending have prompted more Britons to rent homes.
"In the near term, the buoyant UK rental market should continue to support buy-to-let borrowers, but interest rate rises are a risk on the horizon," Mark Boyce, a credit analyst at Standard and Poor's, warned.
- Thursday 12 May 2011