75% of landlords made profit despite downturn and credit crunch

Posted under General by Alan

In spite of severe downturn and credit crunch, the Residential Landlords’ Association (RLA) has disclosed that number of mortgaged landlords who made profit in 2008, has surprisingly remained at same level of 2007, when property market was at its peak.

The latest research was conducted by buy-to-let mortgage broker, The Money Centre. It reveals that 75% of landlords with buy-to-let mortgages have enjoyed profit, which increased by nearly 5% during closing months of 2008.

However those landlords whose properties are located in oversaturated areas were not that fortunate. They were caught in the situation of high supply and low demand.

The picture is not rosy across all municipalities. Landlords in certain parts of London have felt the crunch, while those outside M25 in Farnborough did very good business.

As per RLA’s report, Redrow Homes, which has launched a major housing project in Farnborough, is prompting cash rich landlords to take advantage of low interest rates and falling prices by urging them to extend their current portfolios.

The predictions that UK house prices would still be falling by nearly 15% during current year due to job losses and shrinking economy, are making mortgaged landlords nervous about prospects of making profit in 2009.