The buy-to-let market is set to expand further in 2007 with a fifth of those planning to buy a home expecting to use their property as an investment, a report suggested today.

Research from Birmingham Midshires revealed that the demand for landlord mortgages is set to remain strong following a healthy 2006 which saw the number of buy-to-let loans taken out surge by 48%.

The specialist lender said 20% of people who expected to buy a house over the coming 12 months intend to use the property as an investment.

And as many as 40% of 20-somethings hoping to buy during the year are looking at investing in buy-to-let property, survey results indicated.

It follows a year in which landlords have seen healthy returns on their property investments across the UK.

Regionally, Northern Ireland performed the best in terms of buy-to-let property last year.

The region saw a price growth of 30% on buy-to-let properties, with the average 2006 price set at £101,453, up from £78,132 the year before.

It was joined by Harrow, Stoke & Stafford, Sheffield and Twickenham as the five property investment hotspots across the UK, data from Birmingham Midshires showed.

Tim Hague, director of mortgages at Birmingham Midshires, said: "The buy-to-let market has grown consistently over the past decade.

"When you consider the returns available, in terms of both capital appreciation and rental yield, it is easy to understand why property investment continues to grow in popularity.

"A growing number of people see property as an important part of a balanced investment portfolio."

Copyright Press Association 2007

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