The number of landlords in the buy-to-let market are peaking, according to lender, Paragon Mortgages.
It claims the number of mortgages arranged in the last quarter of 2002, for first-time landlords, fell from 39% to 32%.
The lender’s quarterly survey also shows buy-to-let mortgages comprised over 10% of the total market in the last quarter, up from 9.2%. 41% of these were taken out by established landlords.
John Heron, managing director at Paragon, commented: ‘The fact that more experienced landlords are stepping up investment in rental property, while fewer novice landlords are entering the market demonstrates the maturity of the buy-to-let market. We also know from other Paragon surveys that professional landlords are buying more modestly priced properties to maximise rental returns.’
Returns expected from the sector vary from between 4% and 7%, according to rental returns from Association of Residential Lettings Agents (ARLA) members. While rental conditions remain difficult in London and the South East, John Crossley, chairman of ARLA, said: ‘Our figures show a relatively stable market with encouraging signs of new rental activity.’