Buy-to-let investors enjoying increasing demand

Published: November 27, 2007

People with buy-to-let mortgages can expect their rental yields to improve in the coming months as demand from tenants is particularly strong at the moment, a new report has suggested.

Figures from the Association of Residential Letting Agents (ARLA) indicated that over two thirds of landlords in London have reported that they have more tenants than there are properties available to rent.

This is also the case for some people with buy-to-let mortgages in the south-east of the country.

Overall, 37 per cent of landlords said demand was outstripping supply.

"This peak demand should come as no surprise," said Ian Potter, head of operations for ARLA. "It has been driven up by the many competing demands for rental accommodation and now we have softening house prices."

Increased demand means that those with buy-to-let mortgages are able to increase their rents. In fact, rents in London and the south-east are considered to have risen very significantly,with the majority of letting agents reporting increases.

"These latest figures confirm that the private rented sector will once again be the safety valve for a housing market worried by the current financial uncertainties and the softening of house prices," Mr Potter concluded.

However, a recent report from the Royal Institution of Chartered Surveyors (Rics) indicated that it was becoming more expensive for people to get buy-to-let mortgages.