Low interest rates 'could help housing shortage'

Monday, May 17th 2010

Low interest rates on buy-to-let mortgages would make it easier for landlords to pay off their loans, which may also benefit their tenants.

This is according to private rental sector expert Malcolm Harrison, who said the growing demand for buy-to-let property must be met by attracting more investors.

A report from the Council of Mortgage Lenders found a slight improvement in arrears from the private rented sector.

The amount of loans with arrears above 1.5 per cent at the end of March stood at 19,300 - down from the 20,700 at the end of 2009.

Mr Harrison said first-time buyers are struggling to get onto the property ladder, which may explain the rising need for rental properties.

"If interest rates remain low and if more buy-to-let products come onto the market, it is going to be good for the private rental sector," he added.

The current shortage in houses is undoubtedly going to continue and more investors must be attracted to solve this, Mr Harrison continued.