Landlords plan to grow property portfolios in next year
Wednesday, January 31, 2024
A majority of Buy to Let (BTL) Landlords have been focused on growing their property portfolios in the last 12 months, according to new research from The Mortgage Lender (TML).
In total, 52% of residential BTL landlords have added to their property portfolios in the last 12 months, with 25% having added a single property and a further 27% adding multiple.
Looking ahead to the next 12 months, expansion continues to be on the agenda for more than half of BTL landlords. 26% of landlords plan to add another single property to their roster, and another 26% plan to add multiple. This may be attributed to positivity in the market, with 74% confirming they are confident in the residential property market for the next 12 months ahead.
The research looked into what has prompted landlords to add to their portfolios. Increased tenant demand (31%) came out top, while 25% said they grew their portfolio because they had spare capital to deploy.
Residential landlords have also been keen to diversify their portfolios across different property types (21%) and regions across the UK (21%), while 20% added to their portfolio because they wanted to buy a property with a better Energy Performance Certificate (EPC) rating.
While many have been growing their portfolios, there are some landlords who have been selling their properties, with 31% having sold one or more of their properties in the last 12 months and 33% planning to do so in the next year. Looking at the top reasons that prompted this decision among landlords, concerns over re-mortgaging due to rising interest rates came top (35%). followed by concerns over falling house prices (28%). 23% said they sold a property in the last 12 months in order to buy another that was a better investment.
Chris Kirby, Head of Key Accounts & Specialist Distribution at The Mortgage Lender, comments: “BTL plays an important role in the residential property market, ensuring that there continues to be a good supply of quality and well-maintained rental properties to meet consumer demand. Last year’s high inflationary and interest rate environment saw unsettled confidence levels among prospective homebuyers, though for residential landlords our research shows they have not been as discouraged. Many are taking opportunities to grow their portfolios, and with rates reducing, average rents increasing and house price growth predicted, landlords have good reason to be optimistic. It certainly paints a positive picture and highlights the continued interest in BTL as an asset class.
“For those landlords who are looking to grow their portfolios, it’s important to seek advice to ensure they are accessing the best possible opportunities in the coming year.”
Methodology - The Mortgage Lender surveyed 1,001 residential (buy to let) landlords via Censuswide between the 18th October and 24th October 2023.