Buy-to-let market still proves resilient

In the last couple of years, buy-to-let investors have found many reasons to rejoice. The housing market has witnessed two back-to-back years of double-digit growth and rental earnings have skyrocketed. But what about the buy-to-let market today in the current economic climate and with all the headwinds it faces?

A survey, which asked landlords about their plans for the coming twelve months, identified that landlords have remained relatively resilient despite increased costs and tougher stress tests. Of those surveyed, almost three-quarters said they had no intention of selling their properties next year[1].

The survey also revealed that most landlords are expecting to take on more tenants, with over half planning to increase their portfolio size.

Despite challenging market conditions, this resilience was strongest among landlords with smaller portfolios of one to three properties, at 78%.

CHALLENGING MARKET CONDITIONS

The findings show that seven out of ten landlords do not plan to sell their properties in the next year. Despite challenging market conditions, this resilience was strongest among landlords with smaller portfolios of one to three properties, at 78%. It was followed by those who had four to ten properties at 76%, and landlords with more than 20 properties at 69%.

Respondents cited potential falls in property prices and strong rental yields as primary reasons not to sell.

Others said they wanted to wait and see what happens to mortgage rates over the next few months before making a decision. Just under half of landlords stated that rising interests would be the deciding factor to sell, while under a quarter said that rent did not cover mortgage costs.

STILL SIGNIFICANT OPPORTUNITIES

In light of this news, it is clear that many landlords remain an important part of our housing market, providing a vital service for renters across the country.

Despite rising mortgage rates and stricter lending criteria, there are still significant opportunities available for prospective landlords looking to invest in buy-to-let properties. With the help of expert advice, a key point from the survey is that making an investment in the right buy-to-let property could be a good move for some property investors.

Don’t forget, our professional friendly advisers are on hand to support you and can help you explore all of your options.

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