LONDON, September 24 /PRNewswire/ --     With relatively low loans on their investment properties, more than half
of all Buy to Let investors expect to increase their portfolios over the
coming twelve months and 90% of investment landlords said they would not sell
should house prices fall, according to the latest ARLA quarterly Review and
Index published today, Monday 24 September. This is based on the largest
independent survey of the Private Rented Sector.

However, if the summer's demands for changes in the tax regime for
residential property investment were to be met, a significant number of
investors would then consider selling, this latest Review shows. It is tax
changes that would severely damage the Private Rented Sector.

The ARLA Review and Index for the third quarter shows that 54% of all
landlords surveyed during August expect to make further Buy to Let
investments during the next twelve months. However, if mortgage interest
ceased to be an allowable business expense, more than four out of ten, 42%,
said they were uncertain what they would do.

And, a significant minority, 28%, said they would certainly sell some
property, while ten percent said they would sell out of the Private Rented
Sector altogether.

Commented Ian Potter, ARLA Operations Manager, "With the institutions
less interested in the Private Rented Sector and private equity companies not
filling the gap, the loss of any private individual investors would seriously
effect the rental market and severely curtail choice in housing."

"Private Buy to Let investors have refinanced the Private Rented Sector
and restored social acceptability to renting," Ian Potter added.

The quarterly Review and Index is based on data from the largest surveys
of investment landlords and lettings agents in the Private Rented Sector. For
the summer quarter, and despite the holiday season, 191 landlords and 463
ARLA member letting offices responded.

These in-depth, independent surveys are supported by the ARLA Group of
Mortgage Lenders: Bank of Ireland, Cheltenham & Gloucester, GMAC RFC,
Mortgage Express, NatWest and Paragon Mortgages.

The average Loan to Value ratio for Buy to Let investors in the last
Quarter was 59%, marginally less than in the previous quarter. The proportion
with loan to value ratios between 51% and 75% has dropped marginally, with a
corresponding rise for those with ratios between 25% and 59%. Just over a
quarter of all Buy to let investors have loan to value ratios of between 76%
and 90%, with only 1.3% with loans to value of more than 90%.

The Review and Index continues to show that the vast majority of
landlords invest for the long term. The average life expectancy of their
property investments is 16.5 years, with nearly a quarter expecting to hold
their investments for more than 20 years.

Over half of all landlords are investing for long term capital gain,
while the number looking for a combined yield from capital appreciation and
rental income dropped from 45% to 40%. Very few, only 2.5%, look to make
short term capital gains.

The Review shows annual rates of return, including rents and capital
appreciation, for the last quarter across all regions as averaging 11.34%
from an outright cash purchase of residential investment property and 22.26%
from a geared residential property investment.

Editors' Notes: Full details of the ARLA Review and Index, and the
quarterly letting agents' and landlords' surveys going back to 2001 are
available and can be downloaded on http://www.arla.co.uk.

ARLA is the lead professional body for the private rented sector with
well over 2,000 members' offices throughout the UK. ARLA launched Buy to Let
in 1996 with the support of the ARLA Group of Mortgage Lenders. This
initiative was designed to revitalise a weak rental sector following the
housing crisis of the early 1990s.