The outlook for 2007

The buy-to-let boom is expected to continue this year as more people pin their hopes on rising house prices making up for inadequate pension savings.

Lack of confidence in the stock market is fuelling increased investment in rental properties despite their income failing in many cases to cover interest and management costs.

A recent survey published shows 8 in 10 mortgage brokers expect to see an increase in buy-to-let lending in 2007. More than half said their clients admitted to buying property to supplement poor retirement savings.

The survey, conducted by market research group Lighthouse, shows high levels of complacency about the prospects for house price growth. More than 90 per cent of mortgage brokers said prices would rise again next year and just 3 per cent expected even a modest fall.

The Council of Mortgage Lenders said 152,500 new buy-to-let mortgages were advanced in the first six months of 2006, up 17per cent on the second half of 2005 and seven times as many as six years ago.

Your home may be repossessed if you do not keep up repayments on your mortgage.
Article date: 12.06