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BTL landlords grow portfolios

The average size of buy-to-let portfolios rose from 4.9 to 5.7 properties in the second quarter of 2005, says the Association of Residential Letting Agents.

Its quarterly survey, based on responses from 489 regulated agents and 322 investment landlords, finds that average annual rates of return have risen by 0.1 per cent to 11.28 per cent on cash purchases and by 0.25 per cent to 22.55 per cent on geared investments since the previous quarter.

Forty-seven per cent of residential landlords questioned by Arla say they look for both a rental income and capital appreciation from their properties while 44 per cent invest solely for capital apprciation and 7 per cent solely for rental income.

Eighty-two per cent of tenancies are arranged as assured shorthold tenancies. Other forms of tenancy reported include short-term lets, holiday lets and contracts with housing associations and other regulated social landlords.

The report shows average capital asset values of rented houses rose by 0.2 and 0.5 per cent respectively in central London and the South-east over the last three months while values in the rest of the UK are up by 2.3 per cent.

Chief executive Adrian Turner says: “One of the significant advantages of buy to let is the long-term approach of the 21st Century landlord. From the beginning, we knew that the concept of buy to let attracted the financially mature investor. Once again, this is being illustrated by the clear understanding shown of the long-term contra-cyclical nature of residential property investment.”

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