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More immigration could boost B2L

The entry of Bulgaria and Romania into the European Union last week sparked optimistic predictions of a buoyant buy-to-let market in 2007.

The two former Communist countries became members of the EU on January 1, taking the membership of the bloc to 27 member states.

Predictions of how many people will come to Britain from the new members vary from 56,000 to 180,000 in the first year, while Treasury statistics estimates total immigration will continue at an annual rate of between 185,000 and 190,000 for the next three years.

Paragon Mortgages says the influx of migrants will prompt further growth in the buy-to-let market.

John Heron, managing director of Paragon, says: “Inward migration is a driver of tenant demand. Less than 20% of migrants become home owners within five years which means that an influx of people, particularly from Central and Eastern Europe, will have an impact on the private rented sector.”

But think tank MigrationWatch has questioned the economic benefits of immigration. Contradicting government estimates, it says that the contribution of immigrants to the economy is as little as 4p a week.

In the past, the Conservative Party has also spoken out against the government’s immigration policy and warned that migrants put a strain on housing in some areas.

But Lee Grandin, managing director of Landlord Mortgages, points out that immigrants make up a significant proportion of the workforce, including much-needed house builders.

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