Landlords add to buy-to-let portfolios thanks to Bank of England's lending scheme

Landlords are looking to take advantage of slightly looser bank lending to add to their property portfolios according to a raft of research from the rental market.

The Bank of England's £80bn Funding for Lending scheme, designed to boost lending in the wider economy, is seemingly encouraging established buy-to-let landlords to add to their portfolios. According to the Association of Residential Letting Agents the number of buy-to-lets owned by each landlord has on average risen from seven to eight at the end of 2012 – just when looser lending kicked in.

"The latest data from Arla suggests that landlords are carefully but concertedly increasing their portfolios. Strong tenant demand coupled with affordable house prices in some areas will help to sustain the sector's growth," said Ian Potter, Arla's managing director.

Brokerage firm Mortgages for Business says an increasing number of landlords are remortgaging properties to buy more or to move to a cheaper deal. In fact, according to the broker, 80 per cent of landlords it has surveyed are looking to refinance, this compares with just 55 per cent in the fourth quarter of 2011.

"Gross yields on buy-to-let property are particularly attractive thanks to the mess of the first-time buyer market. Property prices are flat and tenant demand is stratospherically high, which is why more landlords are refinancing and manoeuvring to add to their portfolios," said managing director David Whittaker.

In addition, it seems some lenders are looking to get landlords off their books to reduce their property exposure. "While high demand and subdued property prices are the carrot, certain lenders are the stick, particularly RBS and Irish lenders which are demanding landlords refinance elsewhere," Mr Whittaker added.

LSL Property Services says it is already feeling the impact of Funding for Lending on buy-to-lets, observing: "Stronger lending at lower loan-to-value is helping landlords cater for renters, but can't clear the five-year backlog of demand that will underpin rental yields," David Newnes, director of the company.

The Funding for Lending scheme has courted controversy in recent weeks, particularly when it was revealed by financial information service Moneyfacts that a host of savings accounts with high introductory bonuses have been withdrawn. Experts suggested that banks and building societies, boosted by the scheme, are no longer as reliant on savers' cash and are able to pay lower rates of interest, while offering borrowers cheaper deals.

Discover more property articles at Homes and Property
Suggested Topics
Property search
Property search
  • Get to the point
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Ashdown Group: Marketing Manager (B2B) - Romford - £40,000 + car

£35000 - £40000 per annum + car and benefits: Ashdown Group: Marketing Manager...

Ashdown Group: Helpdesk Analyst - Devon - £20,000

£18000 - £20000 per annum: Ashdown Group: Helpdesk Analyst - Devon - £20,000 ...

Ashdown Group: Data Scientist - London - £50,000 + bonus

£35000 - £50000 per annum + generous bonus: Ashdown Group: Business Analytics ...

Ashdown Group: IT Project Coordinator (Software Development) - Kingston

£45000 - £50000 per annum: Ashdown Group: IT Project Coordinator (Software Dev...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'