One in three landlords planning to buy more properties

Tuesday 22nd May 2012

Property investors remain positive about the outlook for the buy-to-let market.

According to the latest Landlord Survey conducted by specialist lender CHL Mortgages, nearly three-quarters (71%) of respondents are positive about the prospects for the buy-to-let market, with only 5% feeling negative.

This percentage of optimists is a fraction down from the 72% recorded in November 2011, but 4% healthier than last summer’s survey.
 
The majority of landlords are happy with the size of their portfolio, with 59% planning to sit tight, although almost one-third (31%) intend to acquire more investment properties in the next 12 months. This compares with 35% who were intending to expand in November 2011 and 33% in August 2011.
 
In terms of actual property transactions over the last 12 months, 17% of respondents said they had bought property, 5% had sold, while 73% of landlords had conducted no transactions.
 
Regarding ongoing tenant demand for private rental properties, 41% of landlords thought it had improved in the past six months, while 54% felt it was the same. Overall, landlords appear to be confident of a healthy and stable rental market at present.
 
Two-thirds (66%) of landlords rate their buy-to-let investment portfolio as a stable, resilient concern, while a cautious 28% have their eye on the Bank of England MPC and lenders’ own interest rate movements, stating that their portfolio may be vulnerable to any potential increases in rates.
 
Bob Young, managing director of CHL Mortgages based in Fleet, Hampshire, said: “Our landlord survey used to be an annual occurrence, but the buy-to-let market is developing at such a rate that we have started conducting more regular polls of CHL landlord borrowers in order to gauge the current mood.

“This latest one shows the vast majority of landlords remaining optimistic about the buy-to-let market’s prospects for the second half of 2012 and beyond, and still regarding the private rental sector as a safe place for their investment.
 
“Just under a third of current landlords intend to supplement their existing portfolios with further property acquisitions, and this figure is likely to be complemented by new entrants and the usual smattering of accidental landlords, meaning the buy-to-let market is likely to remain in good health for the foreseeable future.

“A number of landlords are happy to sit tight and play the waiting game, however, and this could be down to a number of factors including the level of deposit now required to access finance, potential concerns about future interest rate rises and the fact that many lenders are still finding it difficult to access funding lines and have less appetite to lend than historically.
 
“All in all, the buy-to-let market is a positive place to be at present, and while landlords are not immune to wider economic uncertainty, they are confident in existing and future tenant demand, and where appropriate, and given the right finance arrangements, will be seeking to add to their portfolios.”
 
The May 2012 instalment of the CHL Landlord Survey was completed by 807 out of 4,500 landlord borrowers contacted.