Buy-to-let `looking bright` for 2008

Released on: February 29, 2008, 6:38 am

Press Release Author: Jim watson

Industry: Real Estate

Press Release Summary: Buy-to-let investment in the UK is set to go from strength to
strength in 2008, it has been suggested by one industry commentator.

Press Release Body: Buy-to-let investment in the UK is set to go from strength to
strength in 2008, it has been suggested by one industry commentator.

Malcolm Harrison from the Association of Residential Letting Agents (Arla) has
claimed that this year could be yet another healthy one in terms of returns for

He highlighted two \"important factors\" that lead him to believe that landlords are
set to continue enjoying strong returns.

Rental demand is increasing all the time, according to Mr Harrison, who said the
reasons behind this trend are \"demographic\". These factors include things such as
more flexible working, increasing migration and rising divorce rates, which lead to
more single households being created.

Another factor highlighted by the Arla spokesperson is the fact that house prices -
after an extended period of sharp rises - are softening.

\"Traditionally, every time you have house price softening you get increased rental
demand,\" Mr Harrison said.

His comments come after statistics by Birmingham Midshires showed buy-to-let
investors enjoyed returns of 16.3 per cent in the 12 months leading up to December
2007. This was up from the 13.5 per cent they typically received in 2006.

Last year also saw the typical buy-to-let property price rise by 10.9 per cent to
reach an average price tag of 154,795. And Mr Harrison believes that this price
will edge upwards.

\"You can\'t really divorce the buy-to-let market from the private rental sector and
you can\'t divorce the private rental sector from the overall housing market,\" he
explained. \"They are all one and the same; the only difference is in the tenure.\"

Meanwhile, according to the National Housing and Planning Advice Unit, the UK\'s
buy-to-let sector has not played a significant part in housing inflation witnessed
during recent years.

Research by the unit shows higher incomes, household growth, low and stable interest
rates and limited supply were all factors that had a far more significant impact on
house price inflation.

Buy-to-let has often been blamed for the fact that first-time buyers are struggling
to get a foothold on the property ladder, but Mr Harrison does not share this view,
describing the standpoint as \"a load of rubbish\".

He explains: \"The buy-to-let investor tends to go into the middle market; and
buy-to-let, until very recently, has done no more than refinance big chunks of the
private rental sector and only in the last year or so has actually helped to grow
the private rental sector.\"

First-time buyers\' affordability troubles were highlighted again today by Simon
Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics).

He was commenting on new figures by the British Bankers\' Association, which showed
record levels of remortgaging activity in January. Overall, 49 per cent of all
mortgage approvals were for remortgaging purposes.

Mr Rubinsohn said: \"While first-time buyers may be struggling to find finance to get
a foot on the residential ladder, there are increasing opportunities to refinance
for those who already own property.\"

He commented that this trends shows there is \"greater willingness\" among lenders to
pass on interest rate cuts to people who already own homes.

\"It does however throw into sharp relief the claim that a weaker housing market will
necessarily be good news for first-time buyers,\" the Rics chief economist concluded.

In today\'s world Property investment is an excellent investment option especially
investment in UK

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