Rise in buy to let property purchases

According to the Association of Residential Letting Agents (ARLA), for the first time in two years, investors in the buy-to-let market are purchasing more properties than the number of homes they are selling.

ARLA's data found that for the first three months of 2009, compared to the last quarter 2008, over twice the amount of the group's members reported that landlords were buying properties - rising from 3.5% to 8.2%. Meanwhile, the amount of letting agents who confirmed that landlords were selling properties fell by 2.3%.

Commenting on the findings of the group's member survey, which appears to suggest that buy to let investors are increasingly looking to take advantage of low house prices, the operations manager of ARLA, Ian Potter, said: "The data shows that there are bargains to be had in the property market at the moment for those with a keen eye. This substantiates our belief that buy-to-let remains a viable long-term investment vehicle."

He went on to say that although there seems to be an oversupply of rental properties, this did not necessary mean that there is not a property shortage in certain parts of the UK.

"It very much depends on the type of property, the experience of the landlord and the quality of advice they receive that makes the difference in identifying a good opportunity to invest," he added.

ARLA's research also looked at rental returns across the UK and found that, by-and-large, the data for the first three months of this year was consistent with figures gathered on the last quarter of 2008, with the rental returns on flats staying unchanged at 4.9%, while the returns on houses had fallen by 0.1% to 4.8%.

"Flats clearly offer a sound return on investment against saving rates, particularly if you're not looking for quick capital uplift," said Mr. Potter.

"The signs are showing that it's a buyer's market at the moment, providing of course you can get the finance. But clearly the interest is there and lenders need to sit up and take notice."

Source: Telegraph.co.uk and the Association of Residential Letting Agents | Last updated: 30th March 2009

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