'No burst' for buy-to-let bubble

Landlords who have a coherent strategy and take a long-term view of letting property will continue to benefit from well-chosen investment, it has been claimed.

Neil Young, chief executive of property investment portfolio managers Young Group, said that the boom in residential housing investment as well as rising interest rates had led to warnings that "the buy-to-let bubble is set to burst".

However, he stated that confidence in the market remains high, citing research from the group showing that 88 per cent of clients questioned expect interest rates to remain below six per cent this year.

Population demographics show a growing demand for rental property in strong locations including London, he pointed out, which is consistently outperforming other UK cities due continued inward migration.

He advised investors to deal with base rate rises by taking a five to ten-year view on their buy-to-let properties, use appropriate levels of gearing and factor in contingency to accommodate a rate change.

Mr Young commented: "Demand for residential property investment shows no sign of flagging. A staggering 83 per cent of those questioned plan to buy additional residential property investments within the next 12 months."

The Bank of England's monetary policy committee is due to meet tomorrow (May 9th) to set the base rate, with high inflation figures leading many commentators to expect a rise.

Landlord Mortgages “Indeed, we do not expect a massive decline in property prices as the lack of supply will counter any increase in the cost of living.”

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