Landlords are increasingly positive about the outlook for the UK buy-to-let market, according to latest research from CHL Mortgages.
72% of all respondents to the specialist lender’s latest Landlord Survey said they were positive about the future of buy-to-let, up from a figure of 67% in summer 2011, and 64% 12 months prior to that.
Increased positivity from buy-to-let sector participants was also visible with a rise in the number of landlords who plan to buy more investment properties in the next 12 months. 35% of respondents planned to make further acquisitions, up from 33% in the summer.
Those who are looking to purchase more property say they are still constrained by both a lack of available funding for both new purchases and remortgage (40%) and the high deposit requirements (37%) that come with buy-to-let products. Only 7% cite a lack of available stock as a reason why they are unable to purchase.
Landlords were also more positive about current demand for rental properties with 47% suggesting it is now better than six months ago (up from 43% in the summer), with a significant 88% now saying the rental income they receive is sufficient to cover their mortgage payments, management and maintenance fees.
CHL believes this is further proof of the growing demand for private rental properties and that rental yields for residential investment properties continue to increase.
Meanwhile, 80% of landlords are not making any overpayments on their borrowings. If the Bank of England were to increase Bank Base Rate to 5% over the next couple of years, 31% said they would have to increase rents to cover their mortgage.
If offered a fixed rate mortgage (5% for five years) only 15% would replace their existing tracker mortgage with such a product.
Bob Young , managing director at CHL Mortgages, said: “We normally only conduct our Landlord Survey every year however with this extra iteration we wanted to gauge whether the growing positivity we had witnessed during the summer had increased just three months later. The research reveals that buy-to-let landlords are increasingly bullish about the state of the sector and their place in it.
