Buy-to-let landlords are continuing to make measured decisions about their portfolios despite remaining pessimistic about the wider UK economy, according to new research from Landbay.
The lender’s latest landlord survey found sentiment around individual buy-to-let businesses has stabilised, with 41.4% of respondents describing themselves as neutral, 21.8% positive and 36.8% negative. However, views on the wider economy were significantly more downbeat, with 69.2% expressing a negative outlook.
Landbay said the findings suggest landlords are concentrating on areas they can directly influence, including financing arrangements and portfolio performance, while remaining cautious about broader economic conditions.
PORTFOLIO ACTIVITY REMAINS BALANCED
The survey found most landlords are not planning significant changes to their portfolios over the next 12 months, although activity levels remain steady rather than subdued.
Just over half of respondents, 51.9%, said they had no plans to purchase additional properties, while 35.3% said they were looking to expand their holdings. Selling intentions remained broadly in line with previous surveys, which Landbay said pointed to continued portfolio reshaping rather than a large-scale withdrawal from the sector.
The research also highlighted continued resilience in rental returns. More than a quarter of landlords reported gross yields between 4% and 6%, while 21.8% said they were achieving yields between 6% and 8%. A further 15.8% reported yields of at least 10%.
More than 75% of landlords said they expected to increase rents over the coming year, although Landbay suggested the introduction of the Renters’ Rights Act was encouraging a more flexible approach to rent setting as landlords balance higher costs with affordability pressures and new legal responsibilities.
FIXED RATES CONTINUE TO DOMINATE
The survey also found landlords remain strongly committed to fixed-rate borrowing despite growing discussion around tracker products in recent months.
More than 87% of respondents said they expected their next mortgage to be a two-year, three-year or five-year fixed-rate product, with five-year fixes the most popular choice at 46.6%. Only 6% said they were likely to choose a tracker mortgage.
Landbay said refinancing activity remained an important opportunity for brokers, particularly for landlords moving off deals secured when rates were higher.
Rob Stanton, sales and distribution director at Landbay, said: “The key difference compared to the results of our previous survey is that sentiment and confidence appears to have stabilised, even during a somewhat turbulent few months, particularly when it comes to product availability and rates.
“Landlords, for the most part, appear to be very confident about their own property businesses, and the future of their investments, even when their views on the future performance of the wider economy remain far more sceptical.
“What we are therefore seeing is a landlord community which is predominantly focused on what they can control. They are making clearer decisions on whether to buy, sell or hold, and are continuing to adapt their strategies to ensure their portfolios remain profitable. It is also clear many landlords continue to achieve strong yields, which underpins their ability to remain active in the market, even in a more challenging environment.
“When it comes to borrowing, the preference for fixed rates remains very strong. Even with more discussion around tracker products, landlords are still prioritising certainty, particularly those looking to plan over the longer term.”
Stanton added that many landlords were still on comparatively expensive mortgage deals secured during less favourable pricing periods, creating opportunities for brokers to review borrowing arrangements and potentially improve cash flow.
