Research from specialist buy-to-let mortgage broker Mortgages for Business has shown that a majority of UK landlords are planning on buying a new property in the next six months. Property consultant Simon Morris explains why a number of factors have led to a surge of activity in the buy-to-let market.
Popularity of buy-to-let
We’re living in a buy-to-let country. The Telegraph reports that nearly one in five homes in the UK are now owned by buy-to-let landlords. The number of properties owned by buy-to-let landlords has almost doubled in the last decade and its set to increase by one million homes in the next five years.
Nearly two thirds of landlords are planning to buy
New research from Mortgages for Business has provided evidence to support the idea that buy-to-let landlords are planning to buy more properties. 65% of landlords questioned said that they plan to buy at least one new property in the next six months.
This is a rise from 55% who said they were looking to buy half a year ago. Meanwhile only 8% of landlords questioned said that they have any plans to put a property on the market in the next since months and 27% said they have no plans to increase or reduce the number of properties in their investment portfolios in the upcoming half-year.
Why are landlords planning to buy?
Mortgages for Business managing director David Whittaker explained the significance of these figures. He was quoted by Property Wire saying: “Landlords are better capitalised and now more confident about reinvesting. A strong rental market is being driven by tenants moving to make the most of job opportunities, and now gradually starting to earn more too.”
He went on to comment: “That new surge of demand is putting more upwards pressure on rents, and landlords are only just beginning to supply more homes to let in response. On top of this, after the surprise stability of a majority government, landlords will almost certainly see a short term boost of house price growth while the threat of damaging regulation has been lifted for at least the next five years.”
The future of buy-to-let investment
Therefore a mix of political, economic and market-specific factors have combined to create a more favourable market for buy-to-let landlords. This is why many of them believe that now is the time to buy. I would further argue that pension reform will persuade more potential investors to enter the buy-to-let market, as these rule change will free up capital for a new generation of investors.