| Buy to Let investors are vital to the health of the whole housing market. Without them there would be little or no choice in housing and they should not be misled by suggestions that they are the recipients of favourable tax treatment.
These were the findings in the publication of a quarterly Review & Index by ARLA, the professional body for the Private Rented Sector.
The latest results show that 42 % of all investment landlords have one or two properties to let while one in 10 have more than 10. Four out of 10 Buy to Let investors have mortgage borrowings with a loan to value ratio of between 51 and 75 percent. A further quarter has borrowings that account for less than half of the value of their residential property investments.
Six out of 10 of these investors expect to acquire further properties during the next 12 months and the average life expectancy of these investments is over 17 years.
Adrian Turner, Chief Executive of ARLA, said: "Again, our quarterly figures show that investment landlords are in the business of residential letting for the long term. This is vitally important. Without these investors, who have helped to save the Private Rented Sector by re-financing it, there would be little or no choice in housing.
"Also, it should be made perfectly clear that these investments are taxed on profit and capital gains in precisely the same way as any other investment or business," Adrian Turner added.
The ARLA Review shows that the current rate of return on a cash investment in rental property is 11.32%, up 0.14%. On a geared - mortgaged - investment, the returns are 23.25%, up 1.57%. These returns include rental yields and capital appreciation.
Again this quarter, the Review shows that the average time tenants remain in a property is longer at 18.2 months, against 18 months in the previous quarter.
Asked what properties investment landlords favour, less than 20% report buying new build. The majority, 45%, have bought property that is already in good condition, 18% bought property needing refurbishment. However, property that is actually in a poor condition is the least likely to be purchased.
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