New research conducted by The Mortgage Lender (TML) has shed light on the overwhelmingly positive sentiment held by residential buy-to-let landlords in the UK regarding the property market’s performance over the next 12 months. According to the study, approximately 74% of landlords expressed confidence in the market’s trajectory.
The research delved into various categories of landlords, uncovering differing levels of confidence among them. Landlords primarily owning houses of multiple occupation (HMOs) showcased the highest confidence, standing at an impressive 86%. Following closely were landlords dealing with student accommodation, displaying an 84% confidence rate, while portfolio landlords, managing more than five properties, exhibited an 82% confidence level.
An assessment of landlords’ expectations regarding the performance of their own rental properties in the upcoming year revealed that 71% were confident. Within this group, portfolio landlords, overseeing five or more properties, emerged as the most optimistic with a confidence rate of 78%. Moreover, landlords boasting over five years of experience in the rental market were notably more assured about their portfolios, standing at a 73% confidence rate, in contrast to their less experienced counterparts at 69%.
The sustained confidence among landlords is partly attributed to the ongoing strong demand from tenants, as reported by 73% of landlords who noted an increase in tenant demand over the last six months. Noteworthy is the fact that a considerable 27% of landlords described this surge in demand as significant.
Rental prices have mirrored this trend, exhibiting an upward trajectory in response to heightened demand and broader economic trends. An overwhelming 73% of landlords reported having raised their rental prices over the past 12 months, with the average increase among surveyed participants being 34%.
Among those who adjusted rents, 52% did so to counter rising operational costs, while 28% aligned their rents with the trend set by other properties in the area where asking rents had surged.
Commenting on these findings, Chris Kirby, head of key accounts and specialist distribution at The Mortgage Lender, emphasized the pivotal role played by the buy-to-let (BTL) industry in bolstering the residential market and ensuring the continual supply of much-needed homes.
Kirby noted, “Despite the challenges posed by higher operating costs and inflationary pressures affecting everyone, maintaining the supply of well-maintained rental properties remains crucial. Landlords aiming to expand their portfolios or remortgage existing properties should seek broker advice to capitalize on the best opportunities in the upcoming year.”