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Landlords 'can expect strong returns'

Owners of buy to let property in the UK can expect very strong return on investment for the foreseeable future, due to the popularity of the rental sector in comparison to the buyers' market, it has been claimed.

Nick Lyons, a rental property expert, made the comment following the publication of a report by the Council of Mortgage Lenders which showed that the number of new buy to let loans increased by 16 per cent in the third quarter of 2011, reaching its highest level since the final quarter of 2008.

Mr Lyons said the lettings market is "extremely busy" at the moment, noting that the demand for buy to let property is constantly increasing due to the difficulty for first-time buyers raising deposits to get on the housing ladder.

"This demand, coupled with a lack of supply of properties, has meant that landlords have the added bonus of strong returns on their investment due to increased rental and low interest rates," he added.

Meanwhile, tenant demand for each property increased by 10.8 per cent in the third quarter of 2011, compared to Q3 last year, according to recent figures from analyst Countrywide, which also marks a significant rise of 11.9 per cent from the second quarter of this year.

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