"There are forty landlords looking to expand their properties for every one landlord planning to chuck in their portfolios entirely. Property remains a reliable investment vehicle"
- Rob Stanton - Landbay
Landlords in the south of England are feeling more confident about the future of the buy-to-let market than their peers in the north and Midlands, according to new data from specialist lender Landbay.
The research, which polled landlords responsible for around 2,000 properties, found that 23% of those in the south are feeling positive about the future. That compares with 17% in the Midlands and just 13% in the north. Negative sentiment is highest in the north, where 44% of landlords said they feel pessimistic about what lies ahead, compared to 42% in the Midlands and 39% in the south.
“Given the current economic climate and the state of play when it comes to taxation and future regulation, landlords in the north and Midlands can be forgiven for not feeling more upbeat about their prospects,” said Landbay's sales and distribution director, Rob Stanton (pictured).
The structure of a landlord’s business also appears to influence the outlook. Those operating via limited companies are significantly more confident than individuals. Only 35% of landlords using limited company structures feel negative, compared to 56% of those operating personally.
Landlords with medium-sized portfolios (between 4 and 10 properties) showed the most optimism, with 31% saying they felt positive. In contrast, those with over 20 properties were the most negative, with 55% expressing a bleak view of the future.
One landlord in the south-east, operating via limited companies, said, “Unless the government unleashes a 1960s-type building boom and build a massive number of council houses, the pressure of limited available rental stock versus the demand from young tenants will ensure rents are buoyant and provide a good business for buy-to-let landlords.”
A West Midlands landlord added, “The future is going to be tough. While there is a demand, there are headwinds and challenges facing landlords.”
Overall, 42% of landlords feel negative about their prospects, while 39% remain neutral and just 18% are optimistic. Despite the challenges, very few are planning to exit the market entirely: just 0.75% said they were planning to sell all their properties.
Of those with a neutral outlook, 25% are considering reducing their portfolios, but none said they intended to leave the market altogether. In contrast, nearly half (47%) of neutral landlords ruled out any expansion, suggesting a cautious approach to growth.
Stanton added, “Landlords have seen some huge changes in the BTL market – increases in stamp duty and the Renters’ Rights Bill being two very significant ones – and may have been unsettled by escalating geopolitical tensions recently, too. That’s all hit sentiment. While there are certainly some headwinds to contend with, it is reassuring to know so few of them are choosing to cut and run entirely."
"There are forty landlords looking to expand their properties for every one landlord planning to chuck in their portfolios entirely. Property remains a reliable investment vehicle. Not only does demand continue to outstrip supply, rental yields are strong."
"Add in a broad range of products that can support landlords in a wide variety of situations, and I’d argue that, even with headwinds, there is reason to be optimistic about building, maintaining and expanding a rental portfolio.”
