UK buy-to-let still strong

The UK buy to let market is not in crisis and it is a good time for professional investors, according to three respected national organisations.

And there is good news ahead as one financial expert predicts inflation will reach its peak soon and allow the Bank of England to cut base rates.

Three key organisations in the UK, The National Landlords Association, The Council of Mortgage Lenders, and The Association of Residential Letting Agents have dismissed a recent report from Bradford & Bingley, the UK's largest lender to private landlords that the sector is in crisis.

The National Landlords Association insists the industry is counter cyclical and as rental rates are rising it is an ideal time for investors.

'The NLA does not subscribe to the view that the end is in sight for the buy-to-let market,' said its chief executive David Salusbury. 'The key is to stay in close contact with your mortgage broker and seek the best deals,' he added.

The Council of Mortgage Lenders has similar views. 'Demand is still strong. When people don't want to or can't buy then they rent,' said spokesperson Sue Anderson.

And The Association of Residential Letting Agents said that demand for residential lettings has increased as a direct result of the credit crunch. In its latest quarterly survey, Arla found that 39% of agents are now seeing demand exceeding supply, especially in London and the south east of England.

The organisations are pleased by predictions that UK inflation will pass its peak in the next few months and allow the Bank of England's monetary policy committee (MPC) to start cutting the base rate again.

Henk Potts, an investment analyst with Barclays Wealth, said that even although recent inflation rises have taken the consumer prices index rate up to three per cent and might increase it further to as much as four per cent, the factors pushing inflation will fade and the pressure will be eased by slowing growth in the coming months.

'We continue to believe that as the UK slowdown intensifies over coming months and UK inflation passes its peak, the MPC will resume a policy of monetary easing by year end,' he said.

BOOKMARK THIS PAGE (What is this?)