Despite talk of a market slowdown, the coming decade should see a huge increase in the number of buy-to-let investors, says a new report...

Landlords have had a hard time of it recently, what with falling yields and an excess of properties to let, but those who plan to play a long game will find themselves in a booming sector of the market, says leading independent mortgage adviser, Charcol.

In their view, as many as 300,000 more properties will be bought to let out over the next decade as tax breaks and shifting lifestyles change the shape of the UK landlord community.

Charcol's report, The Changing Face of the UK Landlord, says a number of social and economic factors will drive growth over the next decade and ensure that the public's enthusiasm for property investment remains high.

To begin with, there will be a shortfall of over half a million properties available to purchase, and this lack of available stock will keep prices high and force first-time buyers to rent.

Factor in an eight per cent rise in the student population, 1.2 million more single households, an increasingly flexible job market, new tax-efficient property investment opportunities, and more competitive mortgages, and it's clear that bricks and mortar will continue to provide sound investment opportunities.

Property As Pension
Ray Boulger, Charcol's senior technical manager comments: "There's been plenty of speculation about jitters in the buy-to-let sector, but a convergence of socio-economic factors suggests strong prospects over the next decade, and two out of three landlords say they're in the market for at least this long.

"The reasons for the recent yield dip are clear, but as Base Rate peaks, the housing market steadies, and rents edge up, landlords will enjoy healthier returns."

Boulger added: "We believe one of the biggest triggers for market growth will be the ability to house your buy-to-let property within a pension scheme from April 2006, and thus attract significant tax relief."

The report also found that:

Around half of all landlords are currently buying their property on a mortgage

Two-thirds of investors are in the market for at least ten years, and three quarters (75%) of existing landlords plan to rent out more property within the next decade

36% of UK buy-to-let investors are female, and one in eight is aged under 35

Four out of ten investors live in London or the South East, while almost a third live in the north of England (22%) or Scotland (9%)