Landlords remain optimistic about buy-to-let

Property investors remain positive about the outlook for the buy-to-let market, according to the latest Landlord Survey from CHL Mortgages.

71% of landlords who replied to the survey are positive about the prospects for the buy-to-let market, with only 5% feeling negative. This percentage of optimists is very slightly down from the 72% recorded in November 2011, but 4% up on last summer’s survey.

The majority of landlords are happy with the size of their portfolio with 59% planning to sit tight, although 31% intend to acquire more investment properties in the next 12 months. This compares to 35% who were intending to expand in November 2011 and 33% in August 2011.

In terms of actual property purchases and adding to portfolios in the last 12 months, 17% of respondents said they had bought property, 5% had sold, while 73% of landlords had conducted no transactions.

41% of landlords thought ongoing tenant demand for private rental properties had improved in the past six months, while 54% felt it was the same. Overall landlords appear to be confident of a healthy and stable rental market at present, CHL said.

66% of landlords rate their buy-to-let investment portfolio as a stable, resilient concern, while 28% have their eye on the Bank of England MPC and lenders’ own interest rate movements stating their portfolio may be vulnerable to any potential increases in rates.

“Our landlord survey used to be an annual occurrence, but the buy-to-let market is developing at such a rate that we have started conducting more regular polls of CHL landlord borrowers in order to gauge the current mood,” said Bob Young, managing director of CHL Mortgages.

“This latest iteration shows the vast majority of landlords remaining optimistic about the buy-to-let market’s prospects for the second half of 2012 and beyond, and still regarding the private rental sector as a safe place for their investment.

“Just under a third of current landlords intend to supplement their existing portfolios with further property acquisitions and this figure is likely to be complemented by new entrants and the usual smattering of accidental landlords, meaning the buy-to-let market is likely to remain in good health for the foreseeable future.

“A number of landlords are happy to sit tight and play the waiting game however and this could be down to a number of factors including the level of deposit now required to access finance, potential concerns about future interest rate rises and the fact many lenders are still finding it difficult to access funding lines and have less appetite to lend than historically.”

Young added: “All in all, the buy-to-let market is a positive place to be at present and while landlords are not immune to wider economic uncertainty, they are confident in existing and future tenant demand, and where appropriate, and given the right finance arrangements, will be seeking to add to their portfolios.”