Insurance News Archive

Buy-to-let market remains 'healthy'

The buy-to-let market remains in a 'healthy' condition, according to new data from mortgage provider Paragon.

The group believes that despite interest rate rises, which may have deterred new investors from entering the market, the buy-to-let market has remained in good shape.

According to Nigel Terrington, gross rental yields have often exceeded six per cent this year, with returns in the last month having surpassed ten per cent on average.

"This kind of return compares very favourably with other forms of investment, such as equities, cash deposits or fixed income securities," Mr Terrington said.

Despite the possibility of a further interest rate rise in November being mooted among financial experts, Mr Terrington said that landlords would be more likely to borrow than owner occupiers.

"While rising borrowing costs do impact on investors, on average landlords are less highly geared than owner occupiers," he explained.

25 Oct 2006