Buy to let property sales rise
24th Feb 2012
Buy to let investments are increasing in popularity once again, according to new figures which reveal that landlords purchased 20 per cent more property last year than in 2010, as they were tempted back by cheaper house prices and higher rents.
The data was published by advice network The Landlord Syndicate, which said it is clearly good news for the private rented sector.
However, the organisation is urging new and existing landlords to take a more cautious approach in 2012, focusing on affordability, location, and commitment in order to avoid mistakes.
Simon Thompson, chairman of The Landlord Syndicate, said there has been much debate on whether capital appreciation or rental yields are more significant when investing in property.
Although any new landlord will look for security on their savings, investing for capital appreciation is not the market driver, the expert said.
Rather, holding on long term for yields will be key – something exemplified by those landlords who bought into buy to let for the long term with sensible mortgages and low costs, and are now profiting from rising rents, increasing yields and profits, Mr Thompson said.
"For the foreseeable future, capital growth will be negligible and hence rental yields are crucial, demonstrated by the fact that lenders view rental yields more critically than in the past" he added.
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