NLA remains bullish on buy-to-let

Permalink: NLA remains bullish on buy-to-let
by Gill Montia

The National Landlords’ Association (NLA), which represents almost 20,000 individual landlords, has responded to the gloomy forecasts for buy-to-let that followed the nationalisation of Bradford & Bingley (B&B), by dismissing claims that the sector is dead.

The NLA points out that only 25% to 30% of landlords use buy-to-let mortgages to finance their property purchases.

According to Simon Gordon, head of Communications at NLA, the cautious and mature investor who has bought the right property in the right location will be seeing an increase in rents and can expect demand to keep climbing.

The Association points out that many factors will contribute to a rise in tenant demand; later marriage and a high divorce rate combined with the slow growth in social housing provision mean that families are increasingly looking to the private-rented sector for housing.

Immigration and an increasingly mobile workforce are also key factors in future tenant demand as is the UK’s student population, which continues to swell.

However, B&B is the UK’s biggest buy-to-let lender and analysts have been quick to point out that public ownership could mean that its £41 billion mortgage book will effectively be wound-up.

In the case of Northern Rock, which was nationalised in February of this year, unattractive rates for remortgagers encouraged its customers to seek deals elsewhere.

If B&B follows a similar pattern, landlords could be forced to seek out new deals in a market that has shrunk dramatically since the onset of the credit crisis.

Financial website, Moneyfacts, reported that 500 residential and buy-to-let loans disappeared overnight when plans to nationalise B&B were announced, reducing the number of buy-to-let loans available in the UK to 481.