The current economic downturns and their effects on the property market are showing in the buy-to-let sector. According to a report from the Residential Landlords Association, residential property purchases by British landlords are increasing at a faster pace than before.
Figures from the Association of Residential Letting Agents (ARLA) have indicated that 8 per cent of agents reported new property purchases by landlords over the first quarter of 2009. According to the statistics, these reports have now risen to 16 per cent over the second quarter of the year.
The rise in statistics appears to indicate that landlords have taken advantage of the currently low lending rates offered on buy-to-let loans, and historically low property prices.
The report attributes the low lending rates to the Bank of England, which has continually lowered its rates between October 2008 and March 2009. The base rates implemented are now beginning to have an impact on lending rates.
It is also reported that property prices may have finally hit rock bottom, making this the optimal time to invest in rental property. The report noted that landlords have been able to increase their yields from 4.8 per cent for the first quarter to 5.1 per cent for the second quarter.
The article also offers a word of caution though. Landlords should take into account the fact of falling rental prices.
In parts of London and for most of Manchester, for example, average rental prices have declined from ?1,682 at the beginning of the year to the current rate of ?1,570, according to the ARLA figures.
