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Stability in BTL as asset values hold the line

The average capital asset value of houses and flats in the private rented sector remained stable during the first quarter of 2004, according to data from the Association of Residential Letting Agents.

The Arla buy-to-let index remained at 100 for cash purposes of buy-to-let properties and 100.1 for property investment relying on a mortgage.

The index, set up in September 2002, takes account of capital appreciation and includes yield, rent and void period data from almost 500 letting offices run by Arla members.

The projected annual rate of return over five years on a cash purchase of buy-to-let property is down by 2 per cent to 11.17 per cent for the first quarter of 2004 from 11.39 per cent in the final quarter of last year.

President Robert Jordan says investors should remember that yields do not reflect average rents received and will always be seen to fall if house prices continue to rise.

Jordan says: “Anyone who tries to report that the buy-to-let market and the private rented sector is unstable is not reading the figures correctly. The market remains stable and, as our recent investor survey shows, the average investor landlord is expecting to hold their property investments for between 10 and 20 years.

“This shows a full understanding of the buy-to-let market and the contra-cyclical nature of house price inflation and rental demand.”


FSA says the independent sector must face up to its obligations

The FSA has issued a warning that while it wants to work with IFAs, this can only be achieved by a change of attitude within the independent sector. In a letter to a sole trader, FSA managing director and former IFA supremo David Kenmir says there is no benefit in continuing dialogue with IFAs if […]

Bankhall buys NU&#39s mortgage club

Bankhall has announced the acquisition of Norwich Union&#39s mortgage club, with the sale expected to be completed by May, 2004. Currently the fourth biggest club in the UK with 35 member lenders and 7,000 intermediaries signed up to it, NUMC joins Bankhall only months after the support services provider acquired Prudential&#39s much larger mortgage club. […]

Tilney investment tailored to measure

TILNEY INVESTMENT MANAGEMENT Opal Tailored Solutions Type: Capital-guaranteed fund of hedge funds Aim: Income or growth linked to the performance of the Opal Optimum Master Fund Minimum-maximum investment: £10,000-no maximum, Isa £5,000 Term: Five years and one month Guarantee: Secure income and secure growth options &#45 Original capital returned in full regardless of performance of […]

Landlords extend property portfolios – Paragon research

The proportion of landlords extending their portfolios rose sharply to 42 per cent this quarter from 37 per cent the previous quarter but the number of those buying their first investment property fell from 30 per cent to 27 per cent according to figures from Paragon Mortgages. Mortgages arranged by brokers and mortgage advisers fell […]

Can UK companies satisfy global appetites?

By Mark Martin, Manager of Neptune UK Mid Cap Fund

Rapid economic and income growth is leading to a dramatic shift in diet towards protein products right around the globe. UK companies such as Genus, the world’s largest livestock breeder, are benefiting from this increasing demand. Mark Martin, manager of the Neptune UK Mid Cap Fund, discusses this investment theme.


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