Landlords predict rising portfolio values for 2007

Confidence in the buy-to-let market is high for 2007, with almost four in ten of all landlords questioned believing that the value of their portfolio will increase over the next 12 months, according to a survey of landlords by Paragon Mortgages.

A further half believed their portfolio value would remain stable, while less than one in twelve believed their portfolio value would decrease.

Despite November’s interest rate rise, confidence is higher this quarter than it was last quarter, with 38% of landlords believing their portfolio value will rise, compared with 35% last quarter.

John Heron, Managing Director of Paragon Mortgages said: “Landlords are confident that the buy-to-let market will continue to prosper in 2007 and beyond. Both through capital appreciation of their existing portfolios and new property acquisitions, landlords expect their portfolios to increase in value by 2.6% over the next 12 months. This compares with an expected rise of just 0.4% two years ago.

“House prices remain underpinned by supply constraints and sustained demand from a growing number of households. Existing landlords know that the social and demographic factors driving growth in demand for rental properties will continue unabated and their expectations for the next 12 months reflect this. In 2007, landlords are looking forward to both a rise in the value of their existing portfolio, as well as being able to expand them by investing in further properties.”