Buy-to-let can still be profitable for investors

Published: November 21, 2007

People can still make significant profits by using buy-to-let mortgages to invest in property, an industry expert has said.

A recent study by the Royal Institution of Chartered Surveyors (Rics) showed that rising interest rates were making it harder for people to generate profits from buy-to-let investments.

However, Neil Johnson, PR policy manager at the Building Societies Association (BSA), said that people could still use buy-to-let mortgages to increase their portfolio of rental properties.

"There is business to be done though and the lenders that find themselves good quality borrowers will continue to prosper," he explained.

Mr Johnson added that it was important that people considering buy-to-let mortgages had "done their sums" before approaching a lender.

"There is clearly demand out their for good quality rental accommodation … There are still people that want to rent and there are still people unable to buy, so while that remains the same there will always be opportunities out there for buy to let investors," he added.

Finally, Mr Johnson said people should not use buy-to-let mortgages to invest in areas where "the market is swamped".