The number of investors buying property to let increased during the third quarter, with the majority of landlords citing yield as their main reason for investing.
The findings from a survey compiled by Paragon Mortgages, also found the average landlord owns more properties than three months ago.
John Heron, managing director at Paragon Mortgages, said: ‘This shows a recognition of how mortgage borrowing on investment properties brings more favourable returns when it is added to your own money.’
According to figures from the Association of Residential Letting Agents, average returns from rental properties yield around 10% gross, a figure which has increased over the last few years.
The number of buy-to-let loans available has soared with a 50% increase in the first half of 2001, according to the Council of Mortgage Lenders (CML).
Bernard Clarke, communications manager at the CML, said: ‘The low cost and availability of loans for buying property to let, plus the poor recent performance of the stock market and changes to the laws affecting landlords and tenants, have all contributed to its growing popularity.’
Despite the promising figures, the survey was compiled before the terrorist attacks on the US, which may alter future statistics.