Landlords maintain confidence in property investment

Landlords are paying over 13 per cent more for properties than at the same stage last year, according to the latest figures from Paragon Mortgages.

Although the average price paid for a property is slightly down on last month, it is still 5.5 per cent higher than April 2005, when prices had remained at about the same level for a number of months.

In August, landlords paid an average of £160,984 for a property, as opposed to £152,622 in April this year and £141,765 in August 2004.

This in turn has lead to increased rents as landlords look to recoup the extra money spent on properties.

According to John Heron, managing director of Paragon Mortgages, average rents have gone up by 10.5 per cent, which is more than three times the rate of inflation.

Mr Heron said the reason for the increase in the average property price bought by landlords was down to more landlords buying properties and strong levels of demand.

He said: "The summer is traditionally a somewhat quiet time in the housing market, but with renewed confidence, good tenant demand and the UK’s long term structural shortage of decent accommodation, it’s no surprise that investors continue to buy."