Confidence in the buy-to-let market appears to be rising in spite of cooling in the housing market across the UK.
More than four out of 10 buy-to-let landlords – 41% – plan to buy more property in the next 12 months, the latest Landbay landlord survey has revealed.
The main reason for considering buying by 35% of respondents is the increase in the number of tenants – up from 30% of respondents in the Q4 survey. While 33% of respondents said a potential drop in house prices, this is down from 54% last time, potentially pointing to house prices not falling as fast as people originally thought.
The strongest intention came from landlords with 11-20 properties, with more than half (54%) planning to expand their portfolio. While 40% landlords with more than 20 properties shared the same sentiment, so did almost the same number of those with two or three properties in their portfolio (44%).
All is revealed in the latest Landbay quarterly survey which questions existing landlords on a range of topics to find out their attitude and intentions. The survey uncovered the key factors facing landlords and their thoughts on the future of the buy-to-let market.
Paul Brett, Landbay’s managing director, intermediaries said: “Once again high tenant demand serves as a key driver for landlords to consider expanding their property portfolio. And while house prices have remained more robust than some landlords previously predicted, high rental yields are clearly still tempting some to explore the sales market.
“Rather than the buy-to-let market languishing and lots of landlords exiting as some commentators have suggested, this data shows landlords are still seizing the opportunities available. We mustn’t forget those that are undecided though, bogged down by the state of the wider market or the anti-landlord environment we find ourselves in.
“For those that are still undecided, it’s important we all rally behind these landlords. We’re playing our part through constant innovation and expanding our product line to help meet a broad range of landlord requirements.”
Well here at the coal face, does not agree with this story.
There will always be those that want to get into BTL and certainly there have been eye brows raised with asking rents today, which looks inviting. History has shown that BTL interest rises and falls just as markets do. I can write a book on many a landlord who thought it was easy money, to discover the rent didn’t roll in without any effort on their part and were well and truly burnt. TV programmes expose many of them for all to see.
Today is a new era from times gone-by which as an industry remained unchanged for many decades. Regulations are much stricter, taxation could be a killer for some and increasing mortgage rates and maintenance costs eating into yields. Further regulation is on the horizon and it never ceases to amaze me how many existing landlords haven’t a clue what is coming, let alone newbies.
You can only charge so much rent before a tenant will fall into arrears. Arrears that many cannot recover. Don’t fool yourself that rent payment protection is 100% safe. If you rent to someone you cannot confirm affordability …..!
It is key that anyone considering BTL today religious takes a hard look in the mirror. Have I the right property, have I the right tenants, have I the right funds to maintain, do I know the forthcoming regulations and mortgage rate increases and consequences of lost income. What will be my yield? Anyone who answers NO to any of these are in for a rude awakening and many already in the market don’t like what they see and for many considering the risks are too high and are getting out. Many are not professional landlords but dabble thinking its easy money!
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receiving unprecedented sales valuation requests from the letting/managed portfolio to be fair mainly from the 1-2 property landlord’s, but there’s plenty looking to exit the BTL market over the coming 6-12 months IMHO
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This is a Landbay advertorial and, since their business is lending to B2L landlords, it is not surprising that they are talking up the market.
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We are not necessarily seeing this currently, there has been an exodus and I have no doubt that there will be an influx of new BTL landlords once the dust has settled. Moving forward though, landlords will have to be cash rich rather than highly leveraged, they will be buying the more efficient stock such as newer 2 & 3 bedroom houses and, I suspect, avoiding flats with higher service charges. Gone are the days when older houses will be attractive as BTL as the cost to make them tick the greenies boxes will be too great. As a result, tenants will be forced into what is available rather than what they really want or need.
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The exodus has been happening since 2019, when the true effects of S24 became apparent to unincorporated landlords. I read there has been a 30% drop since 2019. I am one of them, with only 1 BTL remaining, and hopefully sold this year. The massive increase in mortgage rates will hit unincorporated landlords even harder, with many already underwater with the rents they are getting, even after increases.
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