Buy-to-let "still powering ahead"

The buy-to-let market is still going strong despite rising interest rates, a financial advice website claimed today.

The website for the Motley Fool, said that a rise in the base rate, which may at first sound daunting for potential landlords, is actually good for investors.

As interest rates rise, first-time buyers are priced out of the market and turn to rentals for affordable housing, it explains, adding that another factor which helps the market thrive is the large number of immigrants who come to the UK and require rented accommodation.

"Two more rate rises are predicted by the end of the summer," the website states.

"Many shrewd landlords have seen these hikes as a time to actually start edging up rent to keep healthy yields."

According to the Council of Mortgage Lenders, buy-to-let mortgages rose by nearly 50 per cent in 2006, bringing the total to approximately 850,000.

And the Motley Fool claims that this influx has helped borrowers gain the trust of lenders, who are in turn relaxing their standards and providing more deals for potential buy-to-let investors.

In related news, figures published today by the British Bankers' Association indicate the mortgage approvals fell by 14 per cent in April.

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