Insurance News Archive

Low savings returns 'could boost private buy-to-let sector'

Low savings rates could see a boost in the buy-to-let sector as investors look for an alternative way of gaining returns, according to an expert.

John Heron, director of Paragon Mortgages, says that residential investment property could offer better earning potential in many cases for consumers whose accounts are offering less than one per cent interest.

"The expansion that the private sector needs is likely to come from existing landlords increasing their portfolios and new investors attracted to residential property because of the solid long-term returns," he states.

Paragon Mortgages' latest trends report shows that the average rental yield was 6.2 per cent in the first quarter of 2009, up 0.5 per cent from 5.7 per cent in the same period in 2008.

Mr Heron says returns are strengthening because demand is high and investors are able to pick up bargains.

In other news, Tom Entwistle, director of LandlordZONE, has said that increasing legislation will not solve repossession problems for owners in the private buy-to-let sector.

31 Mar 2009