There are tentative signs that landlords are beginning to return to the buy-to-let market, particularly in London where house price falls and steady rental growth are gradually enticing investors back, according to Knight Frank.
The company reports that during the first 11 months of 2019, landlords acquired 11% of homes sold in Great Britain, the same level as 2018. But in November alone, the proportion of homes bought by investors increased to 12%.
London recorded a bigger rise in landlord purchases. Landlords purchased 13% of homes sold in the capital during the first 11 months of 2019, up from 11% during the same period of 2018. This was the first rise since 2015 but is in part due to fewer owner-occupiers transacting in the market. But will this trend continue?
The latest UK Finance mortgage data published this week suggests that property purchase and remortgage approvals in November held up relatively well given that the country was in full general election mode.
Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco, said: “For a lot of British households, November was a classic case of better the devil you know.
“They chose to get their houses in order and secure a mortgage before a potentially disruptive election result.
“In the week following the general election result we saw a slight uplift in enquiries but the buyer spirit was largely trumped by the Christmas spirit.
“January will be the real test of consumer sentiment as we approach our departure from the EU.
“There is still much uncertainty as to the intricacies of how we leave the EU, but people at least now know it's coming and that creates confidence.”
The latest UK Finance mortgage data shows that there were 6,600 new buy-to-let home purchase mortgages completed in October 2019, 1.5% fewer than the same period 12 months earlier.
The figures also reveal that there were 16,200 remortgages in the buy-to-let sector in October, 2.4% fewer than the same month in 2018.
Montlake added: “While we are expecting an uplift in transactions and remortgages, it would be premature to assume that 2020 will be a boom year for the property and mortgage markets.
“As negotiations with Brussels unfold there is still the potential for volatility.”