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Buy to Let

Buy-to-let key housing market driver

Adam Williams
Written By:
Adam Williams
Posted:
Updated:
18/03/2013

Increasing interest in buy-to-let has seen asking prices for homes in England and Wales hit a new high in March, according to the latest Rightmove property index.

The property firm found that the average asking price in England and Wales hit £239,710 this month, a 1.7% rise on last month and an increase of 1.2% on the same period last year.

Buy-to-let has remained a key driver for the market with current rents delivering an average gross yield of 5.9%, something Rightmove director Miles Shipside says is due to the Funding for Lending Scheme forcing  rates down.

“There are blindingly good returns on the right buy-to-let investment, with the Funding for Lending Scheme giving the possibility of an immediate and enticing profit gap between borrowing costs and available rental returns,” he said.

“With the prospect of capital growth in future years if you buy the right property, you can see why investors are piling into the rental market – why wouldn’t they when it can offer a much better return than money in the bank?”

Confidence in the market is also strong with the majority of home movers believing that house prices will be the same or higher in a year’s time.

“Positive sentiment on the future direction of property prices is a vital element in motivating more people to buy including those looking to trade-up.

“Whilst outlooks on property prices differ and remain patchy according to location and property type, overall there appears to be an upturn in confidence.”

The report also added that George Osborne’s Budget on Wednesday presented an opportunity for the government to increase momentum in the housing market.


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