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Buy-to-let property investment booming

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Landlords continued to expand their property portfolios in the third quarter of the year.

The Mortgages for Business index found that all areas of the buy-to-let market barring semi-commercial investments grew during the July to September period.

The number of buy-to-let products available rose by 4% compared to the previous three months and the survey highlighted a strong acceleration in residential buy-to-let purchases.

Despite this growth remortgaging figures remained high during the quarter, making up 62% of the total market.

Mortgages for Business said this showed a demand from landlords for extra leverage.

The number of buy-to-let products on the market jumped from 465 to 484 quarter-on-quarter. The number of lenders operating in the sector remained flat at 27.

David Whittaker, managing director of Mortgages for Business, said:

“It’s encouraging to see a sustained improvement in the choice of different mortgage products for landlords – and that competition should help drive cheaper deals too.

“Rates remain low, and yields are consistently high, which is encouraging landlords to increase activity. Confidence is generally high – among both lenders and investors – which is sparking even more growth in the sector. There are some other factors driving landlords to remortgage – for example the continued turning away from the property market by some Irish banks and RBS.

“However, for the most part there’s such a huge amount of interest in buy to let because of the potential returns on investment. Yields are even higher just as landlords are starting to see prices rise more seriously too, so we’re expecting this surge of interest to continue. Fundamentally, demand from tenants is as healthy as ever, and will remain so for the foreseeable future.”

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