Buoyant Buy-to-Let Market

The buy-to-let property market is showing signs of recovery and expansion with a healthy start to 2006, according to a new report.

Research from Nationwide lender UCB Home Loans revealed an increase in the number of tenants looking for buy-to-let property.

Rising house prices have created a new source of demand as would-be-first-time buyers turn to renting rather than purchasing and some areas have seen increases in tenants who are incoming workers from other EU countries needing to rent.

"After a year when it looked as though interest in the market had peaked, we are now in the middle of a year of rapid expansion," said UCB Home Loans managing director, Keith Astill.

"Mid-2004 to mid-2005 was the first year in which buy-to-let purchases ever decreased, but there was a sudden leap of 40 per cent in the number of new buy-to-let mortgages in the second half of last year. This momentum has carried over into 2006, with rising rents and increasing numbers of tenants making the market attractive to landlords," said Keith Astill.

The Association of Residential Letting Agents (ARLA) says that 48 per cent of its members believe there are now more tenants than properties available helping to boost rental yield for landlords.