A recent study conducted by Butterfield Mortgages has revealed that more than a quarter of landlords in the UK are planning to expand their property portfolios in 2024, defying speculations of a mass exodus from the buy-to-let (BTL) market. The survey, which involved 2,000 UK adults, shed light on the sentiments and intentions of landlords in the current economic landscape.
According to the findings, a robust 26% of respondents expressed their desire to acquire additional properties within the next 12 months. In contrast, a mere 7% indicated their intention to sell some or all of their existing holdings. The majority of landlords, comprising 67%, appear content with the current size of their portfolios and have no immediate plans for significant changes.
Butterfield Mortgages’ Chief Executive, Alpa Bhakta, commented on the study’s results, stating, “For the best part of a decade, speculation has been rife that landlords will quit the BTL market in their thousands. However, our data is the latest to challenge such predictions, showing that the vast majority of private landlords remain committed to either maintaining or growing the size of their property portfolios.”
Bhakta further emphasized the enduring allure of BTL as an asset class, even in the face of added costs and regulatory complexities for many landlords.
The survey also delved into how landlords are navigating the recent increase in interest rates, which has elevated the cost of borrowing and servicing mortgages. Surprisingly, only 49% of landlords found this rise in interest rates to be a challenge. Of those, 37% opted to mitigate the increased expenses by raising their tenants’ rent over the past year.
However, a significant portion of landlords, comprising 62%, expressed reluctance to further burden tenants with higher rents, given the prevailing cost-of-living crisis. Nevertheless, 69% of landlords indicated a willingness to raise rents as interest rates and mortgage repayments reach a plateau, foreseeing improved rental yields in the coming months.
Despite economic uncertainties and regulatory changes, the study suggests that the UK’s buy-to-let market remains resilient, with a substantial number of landlords exhibiting confidence in its long-term appeal as a viable investment avenue.