Investing in rental property 'will pay off'
Buy-to-let properties guarantee returns on investment for landlords, it has been suggested.
Chris Horne, editor of online magazine Property Hawk, explained that there is increasing confidence in the market because of interest rates expectations.
Landlords' biggest expense when entering the buy-to-let sector is the cost surrounding mortgages, he pointed out, but it is likely that interest rates will remain low for a couple of years.
"On top of that, more buy-to-let mortgage companies are coming into the market and obviously there is very strong rental demand as first-time buyers are unable to find their deposits," Mr Horne noted.
"All these factors have led to landlords feeling fairly positive. They are in a growth market, finance costs are likely to stay historically low for a long time and so it is a sure-fire winner, in the short-time anyway."
The comments come after a report from Paragon revealed that 23 per cent of landlords are feeling more optimistic about the future of their portfolios.
Respondents to the survey expected to have an average of 13.1 residential properties in their portfolio in about a year's time. Currently, landlords have an average of 12.6 properties they let out to tenants.
According to Paragon, this is the first time in two years that landlords have predicted an increase in their portfolio size.
Mr Horne said: "In terms of finding equity, landlords - who have always been massively disadvantaged compared to private homeowners, in terms of the amount of deposit that they have had to put down - are pretty much on a par now because it is difficult for house buyers generally to get over 90 per cent [loan-to-value].
"That differential is not so great. I think that landlords are in a lot better position now."
A recent survey from the Association of Residential Letting Agents and the National Landlords Association found that one in three landlords in central London said they are likely to invest in more buy-to-let properties over the coming 12 months.
Social media