A significant number of buy-to-let landlords are planning to increase their property portfolios over the next few years, according to research by the Bank of Ireland.
The Bank’s UK Buy-to-Let Market Index found that 46% of landlords with two or more homes expect to increase the size of their portfolio in the next few years, despite a raft of changes designed to bring the housing market under control and create what the former chancellor George Osborne described as a “level playing field” between homeowners and investors.
Despite the introduction of the 3% stamp duty surcharge in April, the scrapping of the 10% Wear and Tear tax relief for landlords who rent out furnished homes, and the pending abolishment of mortgage tax relief, which is set to be phased out from next year, the study also revealed that more than half - 52% - of homeowners would also like to become a buy-to-let landlord, assuming the figures stack up.
What’s also telling from the research is that the buy-to-let market remains resilient to the economic uncertainty created by the referendum vote in June to leave the EU, as reflected by the fact that 54% of landlords think that their buy-to-let investments will not be adversely affected by the Brexit vote, while one in five - 19% - believe that Brexit will benefit their investment.
“The 10th wave of our index shows that attitudes towards the buy-to-let market remain incredibly positive,” said Mark Howell, director of marketing and customer management at Bank of Ireland UK Mortgages.
“Despite a number of events which were expected to have a negative impact on the sector, homeowners and landlords continue to see buy-to-let as a solid long-term investment,” he added.
The findings from the research also show that 55% of landlords expect to increase rents in the near term, while 38% of those surveyed said that they are likely to switch mortgages to cut their costs which will help them cope with the impact of the tax relief changes on mortgage interest payments.
Howell continued: “It’s really encouraging to see such confidence in the market, and I am particularly pleased to see that the Mortgage Affordability Index has risen to record highs.
“Landlords do, however, need to be aware of the impact that George Osborne’s tax changes will have on the sector and ensure that provisions are made to protect against this.”