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Landlords eye reviving buy-to-let investments

The buy-to-let market is ripe for landlords thanks to strong demand and low prices, an LSL Property Services survey has shown.

The findings showed that half of landlords think it is a good time to invest, while less than one per cent think they should be reducing portfolio size.

Of those landlords who are bullish about the market, 82 cite low prices, while 53 per cent point to robust demand from tenants.

Forty per cent of all landlords expect to raise rents this year.

The findings come as one property investment specialist predicted a 12-14 year “bull run” in regional residential property, in the wake of the Council of Mortgage Lenders’ announcement that Buy-to-Let lending had jumped by 5 per cent in the past quarter.

Kingsbridge & Carter co-founder Oliver Barber said the figures “chime with my view that Buy-to-Let investors will see a gradual profit revival in the years ahead, with regional cities such as Leeds, Manchester and Birmingham offering better returns than London.”

“The coming bull market in these areas will last from 12-14 years, and those investing in the market now are likely to make the best returns over time.”

But Jeremy Raj, partner at Wedlake Bell law firm, thinks action is needed to overhaul the short-term rental market.

“Short-term tenancies and rental volatility deter developers and means instability for tenants who are not just young, single people, but increasingly families wanting and needing more security.”

“Institutional investors have been deterred from entering the residential property market by the lack of good quality stock in sufficient quantities and high entry, management and exit costs. Rental price volatility and lack of guaranteed income, something the current British rental system encourages, hardly fosters enthusiasm.”

“The 1988 Housing Act effectively signalled the end of long-term, Rent Act protected tenancies, and introduced the Assured Shorthold Tenancy. The dominance of the AST means management time and revenue uncertainty for investors and tenants.”

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