Assetz® News » HOME | RSS Feed FEED | LIST ALL ARTICLES | ASSETZ HOMEPAGE
Investment Property News from Assetz

Assetz® Property News Service

To buy or not to buy? – the question for investors

8th March 2007 | back to article listings BACK    print this article PRINT

The past week has seen differing advice being offered to buy-to-let investors thinking about making their first purchase or adding another property to their portfolio. With rising house price stories a constant presence in the media, property market analysts Hometrack released a paper this week warning that landlords were in for a period of diminishing returns as rents are failing to rise at the same rate as property prices, narrowing margins.

On the other hand, Alliance & Leicester also produced their own report on the buy-to-let market this week. The results of their research prompted them to conclude that the market is set to grow in value by over 40 per cent in the next decade. This is because the core consumer groups of rented property, namely students and young professionals, are set to grow in number and therefore increase demand.

The Alliance & Leicester research also found that a shift in attitudes was contributing to a rise in the popularity of rented property. It is apparently more socially acceptable than ever before not to own your own home, especially among younger age groups. Respondents also said they valued the flexibility that renting a home gave them.

Stephen Leonard, director of mortgages at Alliance & Leicester, said demand for rented property has been growing steadily and is reflected in increased rental yields. With his firm predicting the growth to continue, he thinks that "buy-to-let becomes even more attractive to both existing and potential landlords".

Hometrack's report noted the further growth in buy-to-let market but expressed concern that the nationwide rise in property prices - which shows no signs of abating - is going to put a dent in landlords' profits. So which report has got it right? According to Ed Stansfield, of economic research consultancy Capital Economics, both have – depending on what the sort of commitment the buy-to-let investor is looking to make to the market.

He warned investors that the rentals market is "not something you can make a short term gain on" and suggests that a property will need to be retained for ten or fifteen years before it begins to make a decent return. Although he is not convinced that the UK is going to see a "structural shift" away from buying a home and towards renting, he is confident that the market has continued room for growth. "In terms of the overall buy-to-let market I think there’s scope for the extent of buy-to-let lending to grow," he said.

And he added: "Buy-to-let is here to stay – it's not going to disappear."

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/3334.html. Alternatively, please see our full press release archive.

Assetz® is a UK and International Property Investment Specialist. Please visit our property sites shown below.

Assetz for Investors UK Assetz Hotels Assetz Homes Assetz International Assetz France Assetz Spain Assetz Cyprus Assetz Germany Assetz Portugal Assetz Ski Assetz Cape Verde Assetz USA Assetz Finance Assetz Fund Management

Accessing the news service

You can view all of the Assetz® UK, International and UK Property Investment Articles and News here.

We also provide an RSS Feed Feed of the news service, or you can view all articles. Click here to view more information on RSS readers and how they make reading online news more convenient.

eXTReMe Tracker