A number of landlords remain confident about the buy-to-let sector despite tax hikes and tougher mortgage rules hitting the private rented sector, according to new research.
Two thirds - 65% - of landlords remain optimistic about the buy-to-let market despite the phasing out of mortgage tax relief, with just 14% of existing buy-to-let investors concerned about the performance of their property portfolio in 2018, according to Shawbrook Bank’s annual ‘BTL barometer’, which explores the existing and future sentiment of professional landlords.
The survey found that many investors are encouraged by good tenant demand and high yields, with one in five - 21% - experiencing an increase in tenant demand in the 12 months to 2018.
Although landlords are optimistic, they are also realistic, understanding they will be facing challenges both in the near and longer term, particularly relating to tax changes.
The number of people actively investing in the buy-to-let market has fallen in recent months, and many experts fear that other existing landlords are making plans to exit the market, as they seek to avoid the government’s attack on the private rented sector.
But despite the punitive tax rises being imposed on the PRS, the indications are that bricks and mortar will remain a safe long-term investment, which is why 39% of landlords surveyed are planning to add to their existing buy-to-let portfolio within the next 12 months, with the North West and South East singled out as the preferred regions.
Karen Bennett, managing director of Shawbrook Bank Commercial Mortgages, commented: “There’s a healthy dose of uncertainty around at the moment, but the BTL market is showing its resilience.
“Property continues to offer an excellent underlying investment vehicle for professional landlords with the right investment strategy.
“While the investment case for BTL remains strong, there are particular challenges ahead for portfolio landlords and the additional impact of the PRA changes.
“Landlords now face much more stringent affordability tests and it’s therefore more important than ever that landlords are clued up on their obligations as the market continues to get even more complex.”