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Landlord purchases in Q1 2022, highest in six years – Hamptons

Investors purchased 13.9% of homes sold across Great Britain in the first quarter of 2022, up from 12% recorded during the same period of last year.

This was revealed in the latest Hamptons Lettings Index, which also found that this year’s figure marked the highest proportion recorded in the first quarter of any year since 2016, when investors rushed to beat the 3% stamp duty surcharge on second homes.

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Overall, investors bought 42,980 homes across Great Britain during the first three months of this year, equating to £8.5 billion worth of property, which is nearly twice the £4.6 billion recorded during the pre-pandemic first quarter of 2019.

The increase in buy-to-let purchases may help reverse the decline of the private rented sector which shrunk from a peak of 5.3 million homes in 2017 to five million in 2021. However, the increase may not be enough to cover the lack of supply, according to Aneisha Beveridge, head of research at Hamptons.

“While we expect investors to continue purchasing at around the same rate over the course of 2022, it’s unlikely to be enough to make up for the full loss of rental homes during the last five years,” Beveridge said.

A lack of stock has also meant that investors are increasingly having to pay over the asking price. According to Hamptons, for the first time since it began recording data, the average investor is paying over 100% of the asking price for a buy-to-let in England and Wales.

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Meanwhile, the average cost of a new let in Great Britain rose to £1,115 pcm last month, up 9.1% from its 2021 low of £1,022 pcm in March last year.

“A lack of rental homes is one of the reasons why rents have been rising at such pace over the last year. March set a new record for rental growth as rents bounced back from 2021 lockdown lows last March,” Beveridge said.

“But as these new buy-to-let purchases begin to feed into the lettings market over the coming months, we expect to see rental growth cool, particularly as the cost-of-living crisis weighs on affordability too,” she added.

By Rommel Lontayao

Source: Mortgage Introducer

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Landlords confident for buy-to-let market outlook

Two-thirds (67%) of landlords are confident about the buy-to-let market outlook in 2022, according to Stephanie Charman, head of strategic relationships at Sesame Bankhall Group.

The figures were revealed within Shawbrook’s recent Changing Face of Buy-to-Let Report, which also found that 34% of landlords are planning to purchase another property this year.

Turning to the percentage of landlord clients considering opening limited companies for their buy-to-let properties, almost a third of broker respondents (29%) said that more than 75% of their portfolio clients were debating the move.

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That was according to a poll conducted by intermediary-only specialist buy-to-let lender CHL Mortgages during a Lender Spotlight webinar session, held in conjunction with Knowledge Bank.

Charman said that the rise in the number of landlords planning to buy this year is encouraging and has been backed-up by anecdotal feedback from lenders.

She went on to explain that lenders have reported seeing an increase in purchase activity within the buy-to-let sector, especially from landlords diversifying and purchasing HMOs and semi-commercial units.

“Our own forecasts point to a buy-to-let market of around £44 billion in 2022. This is slightly down on last year, with fewer new purchases without the stamp duty incentives,” she added.

Even when recent interest rate increases are factored in, rising rents, alongside competitive product pricing, are providing attractive yields, according to Charman.

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Despite these rising rents, a survey conducted by the Social Market Foundation (SMF) shows that 81% of renters said they are happy with their current property, and 85% said they are satisfied with their landlord.

In addition, the survey found that only half of renters expect to leave the private rented sector in the next 15 years, and 13% would be satisfied with long-term renting.

Looking to the average age of tenants, the data shows that, by 2035, more than half of private renting households are likely to include someone aged 45 or older. The Social Market Foundation also believes that couples and families will make up a rising proportion of renters.

“Given the challenges facing prospective first-time buyers in stepping on to the property ladder, the private rental sector continues to play a vital role in fulfilling the UK’s housing needs,” said Charman.

Charman went on to say that other significant buy-to-let drivers include the continued impact of the new Minimum Energy Efficiency Standards.

All buy-to-let properties must now be E rated, with consultations taking place to raise this benchmark to a C rating for new buy-to-let tenancies in 2025 and existing tenancies by 2028.

Within the consultation document from late 2020, it was suggested that the minimum EPC rating should be raised to a band C for all new tenancies by 2025, and all existing tenancies by 2028.

According to Charman, market speculation has suggested these timescales could be pushed out further.

“However, one thing is clear, change is coming and the buy-to-let market will look very different in the future,” said Charman.

When the new rules are implemented, many landlords will have additional upgrade costs to deal with – Charman estimates that for improving EPC ratings, the costs will range from £5,900 to £10,400 per buy-to-let property.

According to Shawbrook Bank’s report, 17% of landlords have already made efforts to improve the energy efficiency of their property, rising to 22% of portfolio landlords.

Of the landlords that had undertaken a refurbishment, 22% had replaced the boiler and heating system in their property, a further 23% had replaced the windows, and 18% had installed new white goods.

Charman believes the speculation around the change in requirements could lead to some divestment and consolidation, particularly among landlords with older, less energy efficient housing stock.

As a result, she said the expectation is that landlords will bolster their portfolio with new build properties.

“With so much change on the horizon, it is vital for advisers and landlords to keep up to date with the latest buy-to-let developments,” Charman added.

By Jake Carter

Source: Mortgage Introducer

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Buy-to-let landlords targeting smaller UK cities and towns

Landlords buying in urban areas are increasingly shifting their purchasing activities to smaller, secondary towns and cities, data analysis from Paragon Bank’s own lending records has revealed.

“Landlord demand for city and town centre property was strong in 2021, with Paragon’s analysis showing completions for house purchases increasing by 100% compared to the previous year,” Richard Rowntree, director of mortgages at Paragon Bank, said.

The strongest increases were seen in locations outside of the UK’s major city centres, according to Rowntree.

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“The strongest growth was not necessarily in the UK’s major cities. Aside from London and Manchester, the top 10 growth locations were in secondary cities or large towns. The likes of Milton Keynes, Luton, Bristol, Northampton and Nottingham experienced strong double or triple-digit growth in completions during the year,” he said.

Milton Keynes experienced a 667% increase in completions in 2021 compared to the previous year. This was followed by Bristol with a 300% increase, Manchester (300%), and Luton (258%).

Other urban locations in the top 10 included Plymouth (183%), Stoke (157%), Northampton (133%), Cardiff (70%) and Nottingham (64%).

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Paragon said landlords have been reacting to changing tenant demand, and that is to retain urban living but in smaller towns and cities.

“There appears to be one of, or a combination of, three factors that each of these locations share. They are in commutable distance to a major city, they mostly have vibrant universities, and they have healthy local economies,” Rowntree said.

In London, Paragon’s figures show a 95% increase in buy-to-let completions in the capital during 2021, with landlords concentrating acquisitions in Zones 2 and 3 as they balanced the requirement for yield, availability of property, and tenant demand.

By Rommel Lontayao

Source: Mortgage Introducer

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Buy-to-let landlords are adapting well to incoming EPC standards

The government’s proposal to ensure that all new rental properties have an EPC rating of at least a C by 2025 or 2026 is already shaping investor buying behaviour, according to the latest monthly lettings index from Hamptons, part of Countrywide.

While the proposal remains at consultation stage, many landlords are already hedging their bets, the agency says.

So far this year, the share of homes bought by investors with an EPC rating of A-C is running at 50%, the highest figure on record, and up from 39% in 2021 and 33% in 2020.

This uplift has been driven by two factors. Firstly, landlords have bought more energy efficient homes where improvement works have already been done. Secondly, there has been a shift towards investors purchasing newer homes, particularly flats, built within the last decade. These properties typically carry much better EPC ratings, with almost all awarded a B or C ranking.

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Investors move towards new build flats means London’s landlords tend to buy the most energy efficient buy-to-lets anywhere in England and Wales. Here, two-thirds – 66% – of new purchases made this year already had an EPC rating of C or above. While further North, investors are more likely to buy higher yielding but older and less energy efficient terraced housing stock. Just 34% of investors in the North East bought a buy-to-let with an EPC rating of C or above.

As well as reducing emissions, the push for higher EPC ratings will also save tenants money. The average tenant moving from a home rated D up to one rated C will save an average of £285 per year on their gas, electricity and water bill at current prices. A tenant moving from a home rated E to one rated C will save £725 annually. While most homes with an F or G rating can no longer be let, the savings from an upgrade to C stand at £1,348 and £2,404 respectively.

If all privately rented homes with an existing EPC rating of D-G were upgraded to at least a C, it would save tenants in England £844m in utility bills each year, or £396 per household. These improvements would leave the average privately rented household paying £326 less in utility bills than the average owner-occupier.

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Share of landlord purchases with an A-C EPC rating (2022)

London66%
South East56%
South West55%
East of England52%
East Midlands48%
West Midlands45%
North West42%
Yorkshire & Humber40%
Wales40%
North East34%
England & Wales50%

Rental growth continued to cool after hitting record highs over the summer months. January 2022 saw average rents rise 7.0% across Great Britain compared to the same time last year, with the rate of growth falling in all but one month since a peak of 8.7% was recorded in July 2021.  The moderation in growth has been underpinned by slowing rental rises across Northern England, which has in part been offset by faster growth across London in recent months.

After 21 consecutive months, January saw rents in Inner London return to pre-Covid levels.  Rents rose by a record 17.3% annually in Inner London to average £2,546 pcm – identical to the March 2020 figure and 29.6% above the mid-Covid low of £1,964.  Meanwhile in Outer London, where rents now stand 9.9% above their pre-pandemic peak, average rents rose 4.0% year-on-year to hit £1,851pcm.

Table 2: Average rent on a new let

Jan-21Jan-22YoY Change (%)YoY Change (£)
Greater London£1,842 £1,9626.5%£120
   Inner London£2,171 £2,54617.3%£375
   Outer London£1,780 £1,8514.0%£71
South East£1,177 £1,2264.2%£49
South West£907 £1,02012.4%£113
East of England£1,049 £1,0974.6%£48
Midlands£720 £7778.0%£57
North£686 £7377.3%£51
Wales£680 £7429.0%£62
Scotland£682 £76111.7%£79
Great Britain£1,055 £1,1297.0%£74
Great Britain (Ex London)£853 £9147.1%£61

Aneisha Beveridge, head of research at Hamptons, said: “By removing the least energy efficient rental homes from the market, government policy has already picked the lowest hanging fruit.  But extending this plan to upgrade homes with a D or E rating up to C will impact a far larger number of households, while generating smaller savings for tenants.  The policy will mean that the average tenant will eventually pay lower energy bills than the average homeowner, although it’s likely to remove some rental homes from the market, putting further pressure on stock levels.

“Given it will prove impossible for all homes to secure an EPC rating of at least a C without significant cost, it’s likely to mean older homes will become considerably less attractive to landlords.  Instead, investors may focus their strategy on buying new builds, with rental homes becoming concentrated in blocks or streets where properties already hold a C rated EPC certificate or where it’s possible to achieve this without significant work.

“The recovery in Inner London rents back to where they were on the eve of the pandemic marks a milestone for London’s landlords.  With Inner London recording the largest ever month-on-month increase between December and January, it appears the recovery in rents still has plenty of steam.  The level of pent-up demand coupled with a lack of stock is likely to support high rates of rental growth over the coming months.”

By MARC DA SILVA

Source: Property Industry Eye

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Where are buy-to-let landlords the most confident about sector prospects?

Confidence among buy-to-let landlords is increasing nationally, but there are certain areas where landlords are particularly confident about sector prospects with increasing demand and shorter void periods.

Every quarter the National Residential Landlords Association (NRLA) undertakes a survey asking landlords if they are feeling more or less confident about achieving their goals compared to the previous quarter.

National landlord confidence has grown for the third consecutive quarter. Confidence is also at the highest level recorded in the 10 quarters the index has been running. This is the most sustained trend seen for landlord confidence in the buy-to-let sector.

In the past year, 15% of buy-to-let landlords surveyed have purchased property. Those who have bought cited anticipated changes in economic conditions as the most influential factor in their property portfolio decisions. Landlords who have bought recently appear to be particularly optimistic about the future.

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Recently, there has been a pattern of a growing proportion of buy-to-let landlords planning to purchase additional properties. The proportion of landlords planning to buy in the next year is 50% higher than in the first quarter of 2020 with 22% of landlords. This is the fifth quarter in a row where this has increased. Additionally, it’s the highest figure recorded since this survey first began.

Areas with the most and least confident landlords

A number of regions are seeing landlord confidence above the national average. Yorkshire and the Humber leads the way with landlords the most confident there. The West Midlands, north-west, south-west, east of England and East Midlands all came in above the national average of landlord confidence.

Although confidence among landlords has generally increased, the north-east, south-east and East Midlands saw a downturn in confidence compared to the previous quarter. Inner London is where landlords are the least confident throughout England and Wales. And the north-east, London, Wales, Outer London and the south-east also see landlord confidence below the national average.

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Increasing tenant demand

The survey by NRLA has revealed landlords have seen an increase in tenant demand for the second quarter in a row. When asked about their perception of demand in their area, more buy-to-let landlords stated they have noted an increase than a decrease.

The net score from that is the highest NRLA has seen since the association began recording demand in the second quarter of 2019. This score has also grown by nearly 10 percentage points since the previous quarter.

Shorter void periods

On a national level, 67% of vacant properties remain empty for less than four weeks. This is a five percent increase on the previous quarter. It’s also almost as high as pre-pandemic numbers, when this figure stood at 68%.

This shows that the majority of landlords’ properties are being turned over and filled increasingly quickly. These shorter void periods is likely due to the strong demand and need for more housing across England and Wales.

With increasing demand and shorter void periods in the private rented sector, landlords confidence could grow further. This could then lead to more investors expanding their portfolios in the next quarter.

By Kaylene Isherwood

Source: Buy Association

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How to show landlords that buy-to-let is still a good investment

Predictions on the future of buy-to-let vary greatly. Some say that the buy-to-let sector is thriving and will continue to grow and expand in line with increasing tenant demand. Others say that the weight of legislation and the associated costs are driving landlords out of the market. So what does this all mean for the future of the industry and how can you encourage your landlords to continue to invest?

Buy-to-let landlords coming and going

First, let’s take a look at the stats. The Nottingham Building Society estimated that 20% of buy-to-let landlords intend to sell all or some of their portfolio over the next two years. This nearly balances with the 16 percent that aim to buy more properties over the same period – but not quite. Research by University of York’s Centre for Housing Policy points to one explanation: ‘baby boomer’ landlords ageing out of the market and not being replaced by younger landlords at the same rate.

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To stem the flow of landlords leaving and to help potential new landlords see the benefits of the sector, your agency needs to show the importance of its role in supporting landlords throughout their journey. The building society’s research showed that 52 percent of landlords intending to sell up blamed this on increased regulation in a recent survey. This leaves an opening for you to help potential landlords recognise the importance of choosing the right agency to help them stay compliant or to show why your current landlords would benefit from your fully managed option.

Buy-to-let limited companies

The end of tax relief on buy-to-let mortgages is another reason cited for 24 percent of landlords planning to leave the industry. However, the question of tax is also driving a new positive trend in the market, with more buy-to-let landlords forming limited companies.

When registered as a company, landlords can grow their portfolios more quickly as they can offset the interest on their mortgage against the profits they make. They also benefit from corporation tax rates which are lower than income tax ones. Hamptons Countrywide found that 41,700 buy-to-let limited companies were formed in 2020 – an increase of 23% on 2019 and a record number, which could help give your landlords more confidence in this route for investment.

Buy-to-let mortgage choice expanding

The increased demand from tenants has also had a positive impact on the number of buy-to-let mortgage products available. Moneyfacts highlighted 2,709 mortgages available in July 2021 – and this influx of new choice means that average rates have started to fall to lower than in July 2019. Which? notes that some of your landlords coming to the end of two-year fixes may even be able to remortgage at a cheaper rate.

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The Paragon Bank echoes this positive sentiment, with buy-to-let mortgage lending up by a third between 1 October to 30 June against the same period in 2020, up to £911.4 million – and applications are still going strong despite the phasing out of the stamp duty holiday.

Investment opportunities in energy efficient homes

As the government continues to advance its plans to increase the minimum energy efficiency standards for private rented properties to EPC Band C on new tenancies by 2028, landlords are understandably concerned about the costs involved with implementing the necessary changes to their properties, projected to be up to £7,646 per property according to the the Office of National Statistics.

However, there are opportunities out there for your landlords looking to invest. Eighty-two percent of landlords, investors and brokers in a recent survey said that they’d prioritise “environmental friendliness and energy efficiency” when buying properties. This taps into increased tenant support for sustainable solutions, and could also have a cost benefit for your landlord; green mortgages could offer your buy-to-let investors lower interest rates if they were to invest in energy efficient properties.

For those with properties already, you could advise your landlords on some low cost ways to improve their properties’ energy efficiency, including using low energy lighting, estimated to cost £38 on average, insulating hot water cylinders at around £23, and draught-proofing windows at £100.

The best places for buy-to-let investment

Trends in the number of buy-to-let landlords in the market should also take into account those areas where investors are seeing the most success. Research by Intus Lettings shows that void periods have dropped for buy-to-let landlords, with a growing number of properties with near complete year-round occupancy in some regions – a quarter of the landlords in the east of England said that their properties were empty for less than a month over a one year period, for example. This reflects Goodlord’s Rental Index data which show that in July 2021 voids on average across England were at their lowest level since August 2019 – so, all in all, a positive outlook.

Some areas of the UK offer higher yields for landlords – and if you’re an agent that’s lucky enough to operate in those areas, you have a strong argument for helping to encourage landlords to join the market. Recent figures show that the North East of England offers the best buy-to-let yields. If you’re advising potential landlords on where to invest, that could be a good place to start.

Source: Property Industry Eye

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Plenty of choice for landlords as buy-to-let options increase

Buy-to-let product choice has increased whilst average two and five-year fixed rates have fallen, according to the latest analysis from Moneyfacts.co.uk.

New figures revealed the average two-year fixed rate was lower now than compared to 2019.

Meanwhile, the beginning of July saw the highest number of product options on offer in the buy-to-let space.

The 2,709 deals on the market at the start of this month represented a 971 leap on this time last year when availability was limited following the product withdrawals which took place during the pandemic.

Moneyfacts said, landlords with 40% equity or deposit would find, even though their level of product choice was lower than this time last year, they were amongst those who might be able to secure a competitive new deal as the average two and five-year fixed rates in this bracket both remained 0.03% lower year-on-year.

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Eleanor Williams, finance expert at Moneyfacts.co.uk, said there were also 365 deals more available now than were recorded in July 2019, demonstrating the strength and resilience of the sector in the aftermath of an unprecedented 18 months.

“The demand for buy-to-let could well remain strong in the months to come as rental demand is prevalent, indicated by recent research from Propertymark’s Private Rented Sector report, May saw a record-breaking number of new prospective tenants registered,” she added.

“Whether now is the right time to invest in property may also come down to the desire to earn a decent income.

“Indeed, research from Nottingham Building Society revealed that 61% of landlords surveyed felt property was a better investment due to low interest rates for savings – and this coupled with high demand for rental accommodation could sway new investors to dive into the buy-to-let sector.”

Williams also explained, due to the influence of the pandemic, interest rates for buy-to-let had climbed year-on-year with the overall two and five-year average interest rates of 2.98% and 3.28% being 0.37% and 0.31% higher respectively than a year ago.

This, she said, may be linked to the increase in availability of higher loan-to-value products.

She added: “These higher LTV deals usually charge a higher rate and can therefore impact these averages. However, despite creeping up a further 0.02% month-on-month, what is positive is the fact that the overall two-year fixed rate is lower now than in June 2019 – which means those coming off a two-year fixed deal may still find a better deal, depending on how much they have in equity and their circumstances.

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“There could still be some understandable hesitation from prospective landlords with some existing investors who could even be considering downsizing their portfolio depending on the pandemic’s impact. However, we are beginning to see some improvements in average rates in certain loan-to-value brackets on a month-on-month basis.

“As house prices rise, demand for rental accommodation is high, and savings rates remain poor, therefore, investing in property could be enticing to some. It is vital though that would-be landlords and those looking to change their deal seek advice to ensure it’s the right time for them and they find the best package for their circumstances and plans.”

Buy-to-let mortgage market analysis 
Product numbersJul-19Jul-20Jun-21Jul-21 
BTL product count – fixed and variable rates2,3441,7382,4862,709 
All 80% LTV BTL products – fixed and variable rates21277147198 
All 75% LTV BTL products – fixed and variable rates971616884952 
All 60% LTV BTL products – fixed and variable rates342414341340 
Average ratesJul-19Jul-20Jun-21Jul-21 
BTL two-year fixed – all LTVs3.01%2.61%2.96%2.98% 
BTL two-year fixed – 80% LTV3.75%3.18%4.20%3.94% 
BTL two-year fixed – 75% LTV3.02%2.72%3.01%3.01% 
BTL two-year fixed – 60% LTV2.07%2.28%2.28%2.25% 
BTL five-year fixed – all LTVs3.50%2.97%3.31%3.28% 
BTL five-year fixed – 80% LTV4.14%3.82%4.34%4.15% 
BTL five-year fixed – 75% LTV3.51%3.14%3.42%3.36% 
BTL five-year fixed – 60% LTV2.51%2.65%2.64%2.62% 
Data shown is as at first working day of month, unless otherwise stated.  Source: Moneyfacts.co.uk

Source: Mortgage Finance Gazette

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Buy-to-let landlords rate energy efficiency of properties as top priority

The green credentials of prospective properties have been rated among the top consideration for portfolio buy-to-let landlords, a survey by Hodge has found.

The bank discovered environmental friendliness and energy efficiency were up there with rental yield and opportunity for capital growth as the top investment priorities when it quizzed landlords, investors and brokers.

Indeed, it was important for 82% of respondents demonstrating how influential green credentials were for landlords today.

Andy Button, head of investment finance at Hodge, said: “The buy-to-let market is particularly buoyant right now with demand continuing to grow throughout the pandemic, and it’s interesting to see how the priorities for landlords are changing when looking to add to their portfolio.

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“While rental yield and potential for capital growth are, of course, top priorities our research reflects a change in mood of the market, where sustainability and green credentials are becoming ever more important.”

“According to a recent Savills report, 26% of people considered the environment the most important issue facing the country and, according to Opinium research, 78% of the public believe they have a personal responsibility to deal with the climate crisis – many of these people will be renters.

“Therefore, to stay competitive landlords can’t ignore tenant preference; they, along with developers and estate agents, are having to provide choice in sustainable housing options.”

Button added: “It’s clear that sustainability will feature more and more in new build development design, and more stringent compliance to EPC, and an investment strategy more closely aligned to sustainability could actually improve cash flows in the longer term, as tenants might be prepared to pay higher rents, in exchange for lower utility costs.

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“Our research suggests that investors are very much alive to the longer term benefits that having sustainability credentials in a portfolio can afford.”

Hodge’s PBTL product has been developed for buy to let landlords with four or more properties, who want to stay organised with one loan to cover them all. It offers mortgages of up to £5 million for between four and 15 properties and will also loan to those buying multi-unit blocks.

The lender also offers a Specialised Residential Investment loan, up to £10 million, for larger investors with over 15 properties/units, and includes specialist property types, like multi-unit blocks and Houses of Multiple Occupancy.

Source: Mortgage Finance Gazette

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A third of landlords have expanded buy-to-let portfolios

Buy to Let – The ‘opportunity to buy at a discount’ is driving many landlords to increase their portfolio a new survey has revealed.

In a study of more than 300 landlords, 34% said they had either recently purchased another buy-to-let property (BTL) or intended to buy one within the next nine months.

While the most common reason for their additional purchase was the opportunity to buy at a discount, other key factors included long‑term investment (35%), stamp duty savings (34%) and diversification by either location (26%) or property type (23%).

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The survey also revealed how 43% of landlords surveyed said that they had temporarily lowered rents during the pandemic to help tenants, with 22% saying they had refinanced their mortgages since the arrival of coronavirus.

Paul Fryers said: “Understanding the purchasing motivations behind professional landlords is an essential factor for Zephyr and our mortgage broker clients.

“It’s equally important to recognise and appreciate some of the challenges landlords have been facing during the past year and how they will affect their current and future applications.

“During the pandemic we saw a significant rise in the use of limited companies to buy and manage property portfolios, and it seems a significant proportion of landlords have made the most of the opportunities provided by the buoyant market conditions we have experienced over the past six months.”

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The survey also revealed only 7% of landlords had taken a mortgage holiday and 13% had sold a property during the pandemic.

Those landlords who did not purchase additional buy-to-let properties over the last year cited ‘declining rental yields’ (51%) and ‘concern about economic stability’ (42%) as their main reasons.

Matt Trevett added: “Although the buy-to-let market has remained more buoyant than some predicted, the last year has not been without its challenges for many tenants and landlords.

“The survey suggests a large proportion of landlords have been acting to support their tenants, with a significant proportion saying they had temporarily lowered rents during the pandemic.

“A recent survey also showed that the pandemic has triggered movement from cities to towns and the countryside, so landlords seeking to rebalance their portfolios may look to make purchases that reflect that trend.”

Source: Mortgage Finance Gazette

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More Than a Quarter of Landlords Plan to Expand Portfolios

Just over one in four buy-to-let landlords are planning to expand their portfolio within the next 12 months, according to fresh research.

With buy-to-let continuing to deliver solid returns that outstrip many other asset classes, a survey by Knight Knox shows that 27% of buy-to-let landlords are currently planning to add to their portfolios in the near term.

The poll of 500 UK landlords by the property investment consultancy found that 27% of respondents are planning to expand their property portfolio in the next 12 months – influenced in part by the stamp duty holiday extension.

Of those looking to invest in property at the moment, 35% say that the stamp duty holiday extension has influenced their decision.

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Knight Knox’s commercial director, Andy Phillips, said: “The last 12 months have been a total rollercoaster for the housing market. Lockdown 1.0 temporarily halted activity before Rishi Sunak’s announcement of the stamp duty holiday led to the industry facing one of the busiest periods for a decade.

“For landlords, the incentive has provided a welcome opportunity to purchase more properties while making significant savings. Appetite for rental property is high – particularly given that the financial impact of the pandemic could be affecting people’s plans to purchase – so buy-to-let is a fantastic investment in the current climate.”

The research also found that on average, UK landlords earn over £20,000 net income per year from renting out properties and 88% are feeling confident or very confident about the buy-to-let market outlook for the next 12 months.

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Two-thirds of landlords said the pandemic had had no impact on tenancies within their properties and just 4% were planning to reduce their portfolio over the next year.

Phillips added: “The property market plays a crucial role in the country’s economy, so it’s encouraging to see that during times of crisis, the government has been forthcoming with lifelines to help keep the wheels of industry turning.

“As long as developers can continue to bring high quality property to market and landlords have the confidence to invest, the sector will remain buoyant and consumer demand for rental housing can be fulfilled.”

By MARC DA SILVA

Source: Property Industry Eye

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