According to a report by BM Solutions, many new landlords expected their investments to pay off financially between five and 10 years. In a survey of landlords on BM’s BTL packages, 15 per cent said they expected to see a profit within the first year while only 5 per cent believed it would take 15 years or more for them to make a profit.
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Despite the short-term profit aspirations, landlords were still taking a long-term approach to the market, the report suggested, with over half of the landlords surveyed believing they would still be involved in BTL for another 15 years. On a longer scale, 16 per cent believed they would still be landlords in over 25 years’ time, with 7 per cent indicating that they would leave the BTL market within the next three years.
Tim Hague, managing director of BM Solutions, said: “Many investors look to BTL as they plan for their retirement, and although they may aspire to make a profit within just five years, they are still in it for the long run. Today’s landlords are set to stay for years to come, with those entering the market thinking about their retirement and planning into the future. This long-term approach shows the confidence in the market.”
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Lee Grandin, managing director of Landlord Mortgages, said: “These figures sound quite realistic. The only potential problems are rising rates, excessive borrowing and landlords expanding their portfolios too quickly. There will also be more urgency with landlords putting their rents up to meet mortgage payments.”
