PROPERTY speculators have turned their sights on East Lancashire, where homes are being snapped up before they are built or without a single viewing. Reporter IAN SINGLETON investigates the boom in buying to let in East Lancashire. . .

LOTS of profit when other investments have taken a turn for the worse - that's why so many people are buying up homes, renting them out and watching the value soar.

The new wave of opportunism was highlighted this week when it was revealed a group of businessmen bought 18 luxury apartments in Blackburn for £2million - before a brick had been laid.

According to buy for let specialists Paragon Mortgages, the average house in Lancashire generated an astonishing 27 per cent return last year - a £21,540 profit on a £79,232 home.

That breaks down to £7,461 in rent and a £14,079 average increase in the value of the property over the year.

Those rewards are becoming increasingly appealing to investors, offering guarantees compared to stock market instability and a confidence crisis in pensions.

And East Lancashire is the place to be, with property prices increasing across the board.

Every town has seen an increase of over 15 per cent last year, with the majority upwards of 25 per cent.

But, despite the huge rises, homes in East Lancashire still only cost half of those in the south on average.

So southern investors find the area's property to be cheap and lucrative, with the prices continuing to rise.

For example, Eafield and Maple Estate Agents, in Blackburn Road, Accrington, has revealed a London doctor bought four houses in the town for £50,000 each without even seeing them. Like the businessmen behind the Blackburn deal, he plans to rent them out and gamble that house prices will continue to rise long-term.

The Association of Residential Letting Agents has come up with a name for these new breed of investors - 'nest-eggers'.

A spokesman explains: "We are seeing this more and more. They are looking for capital appreciation and if they don't get full rent one year they are not worried because they are looking to cash in when they retire, or over a 15 to 16-year period.

"The private rented market has been revitalised by the buy to let investors.

"Stocks and pensions are certainly a contributory factor. The average person who buys to let will also have a good pension and other investments.

"But there is no doubt the instability of the stock market and bad publicity of the pensions have made people look more at buying to let as an option.

"It is also now much more socially acceptable to rent, unlike in the 1980s when it seemed like there was something wrong with you."

The short-term result of this increased demand will be continuing house price rises as buyers compete for potential investments.

But the long-term effects may be damaging, with neighbourhoods being ruined by vast areas of rented property - where the owners do not care who they rent to.

James Whitehead, who runs a self-titled estate agency based in Richmond Terrace, Blackburn, said: "I find the people from London have been watching too many Channel 4 programmes and think 'I'll buy some terraced houses in the North West and rent them out to young people'.

"But a lot are in cloud cuckoo land as they later wish they hadn't bothered because of the type of people who rent them."

Jean Holt, manager of Harris and Moss Estate Agents, based in Burnley, Nelson, Barnoldswick and Colne, said: "We get quite a few more investors buying property worth up to £45,000. That type of property now goes as soon as it comes on the market.

"That has pushed the prices up as there is a market for them. Twelve months ago they would have sold for around £20,000.

"We sell to a mix of people, but, unfortunately, the majority are from out of town and the concerning thing is they put tenants in and these areas could go downhill."

Mr Whitehead also has concerns about unscrupulous estate agents who are trying to cash in.

He said: "They are valuing properties for less, telling the customer they have an investor from London lined up to buy it. The estate agent makes an offer saying it is from the investor - but the estate agents are the ones really buying it to build up their property portfolio on the cheap.

"I had a house in Mill Hill which was valued at £30,000, but one of these estate agents had come around and said it was worth £16,000.

"It is a con. My industry needs to be regulated and monitored by an authority."