The buy-to-let sector is not set for a boom despite huge demand for private rented accommodation, according to Imla chairman and Paragon Mortgages managing director John Heron.
At the Imla executive briefing last week, Heron said there is a boom in demand but this is unlikely to be met by a BTL sector which is set for steady but unremarkable growth.
Heron said: “Is there a boom in buy to let? There is certainly a boom in rental demand as we speak, driven both by long-term and short-term factors, and buy to let is the only growing area in the mortgage market at the moment, with probably about £12bn of gross lending, up from about £10.5bn last year.
“But that is hardly booming. There are constraints when lending to the landlord community, as there are everywhere else. That growth in lending and that growth of acquisition of property by landlords is not currently matching the growth in tenant demand.”
Platform business development director Lee Gladwell said: “A couple of things could tail growth in the sector a little bit. The obvious one is a rise in interest rates, which will affect yields, and the other is the return of first-time buyers but I do not see either in a hurry, so I would foresee continued growth for a while.”