Paragon: Buy to let has revolutionised the rental market

Landlord Expert
By Landlord Expert June 22, 2011 11:20

 

Buy-to-let has revolutionised the rental market, driving up standards and choice for consumers, the managing director of Paragon Mortgages has claimed.

At today's (22 June) Council of Mortgage Lenders (CML) conference, John Heron claimed that buy-to-let has also provided an "attractive alternative" asset class for property investors.

In his opening speech as chairman of the conference, he said: "When we look back on what we have achieved over the past 15 years, we can, as an industry, be justly proud.

"The private rented sector makes a great contribution to the UK economy – it facilitates labour mobility and flexibility, provides an income to thousands of small businesses, supports a number of associated industries, such as letting agents and maintenance companies, oils the wheels of the housing market and makes a great contribution to the public purse."

Mr Heron claimed that buy-to-let had played a "major role" in this, providing the "vital finance" needed to fund the improvement in choice and standards.

He added that buy-to-let had proven its resilience during the credit crunch. He said: "After the worst economic environment for nearly 60 years, buy-to-let has been severely stress-tested and has proved its resilience with the credit performance of buy-to-let now clearly every bit as good as prime residential."

Mr Heron warned that the industry is at a "critical point" in the market's development as buy-to-let face the challenge of supporting a major shift in the way in which housing is viewed.

He said: "Based on government household formation projections and economic forecasts, it is estimated that there will be 4.1m households living in the private rented sector by 2016, a significant jump from the 3.4m we have today.

"The existing stock of private rented property is already under great pressure, so there needs to be a major expansion in the supply of privately rented property to ensure the sector can cope with the number of renters already in the pipeline."

 

Landlord Expert
By Landlord Expert June 22, 2011 11:20

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