Landlords have been buying more properties in the last quarter according to a recent survey. The Association of Residential Letting Agents (ARLA) quarterly survey revealed a “bounce back” in the buy-to-let market.
In the ARLA members’ survey of the Private Rented Sector (PRS) for the second quarter of this year, nearly twice as many ARLA members reported landlords are buying more properties.
The Bank of England’s decision to cut interest rates to historic lows over the past year has also helped struggling landlords, according to ARLA. Half of those surveyed said they thought the cuts are tempting investor landlords back to the market because of the minimal interest to savings rates.
Ian Potter, operations manager of ARLA, said: “Each quarter we glimpse a bit more activity as the bargains get snapped up and confidence is restored in buy-to-let as a viable long-term investment vehicle, particularly if the returns are rising too.
“The government has started to look at the PRS a bit more closely, recognising just how important it is to the property market as a whole.
“Some initiatives, such as the interest rate cut, appear to be having an effect albeit indirectly but there’s still a long way to go to. However it is fair to say that these signs are encouraging and I’m hopeful that this may mean that we’re starting to see the bottoming out of the market.”
The ARLA survey also indicated the rise in buy-to-let activity could be as a result of “increased average weighted rental returns”. Houses had risen from 4.8 per cent to 5.1 per cent, with flats up from 4.9 per cent to 5.0 per cent. Returns for flats remained consistent throughout the UK.
However, optimism is muted in the buy-to-let market by the lack of buy-to-let mortgages on the market.