In the past year, the majority of buy-to-let (BTL) landlords have been actively expanding their property portfolios, a recent study from The Mortgage Lender (TML) has found.
According to the research, 52% of residential BTL landlords have added to their property holdings over the past 12 months. Among them, 25% increased their portfolios by acquiring a single property, while an additional 27% went a step further, adding multiple properties to their real estate assets.
Looking towards the future, the study suggests that more than half of BTL landlords are planning further expansion in the next 12 months. Approximately 26% of landlords intend to incorporate a single property into their portfolios, while an equivalent percentage plan to acquire multiple properties.
Confidence in the residential property market appears robust, with a substantial 74% expressing optimism about the market’s performance in the upcoming year.
Diversification is a key strategy for residential landlords, with 21% aiming to spread their portfolios across various property types and regions across the UK. Another motivation for portfolio growth is the desire to invest in properties with better Energy Performance Certificate (EPC) ratings, cited by 20% of respondents.
However, not all landlords are on an acquisition spree, as 31% reported selling one or more properties in the past year, and 33% plan to do the same in the coming year. The primary reasons behind selling include concerns about remortgaging due to rising interest rates (35%) and apprehensions about falling house prices (28%).
Interestingly, 23% of landlords who sold a property in the last year did so to finance the purchase of another property perceived as a better investment.
Chris Kirby, Head of Key Accounts and Specialist Distribution at The Mortgage Lender, commented on the findings, emphasizing the crucial role of BTL in ensuring a steady supply of quality rental properties in the market. Despite uncertainties in the broader economic landscape, residential landlords seem undeterred, seizing opportunities for portfolio growth. Kirby suggests that with decreasing interest rates, rising average rents, and predicted house price growth, landlords have compelling reasons for optimism. He advises landlords looking to expand to seek professional advice to make informed decisions in the coming year.