The survey showed confidence in the market remains strong, with 39% of existing buy-to-let clients planning to extend their portfolios within the next six months. In addition, 96% expect rent levels to remain the same or increase over the next six months.
The survey provides an insight into the sector on a variety of issues including market confidence, void periods, rent levels and future portfolio plans.
Key findings for Q1 2005 include:
- 39% of respondents anticipate increasing their portfolio size over the next six months, up from 33% in Q4 2004.
- 65% of respondents expect rent levels to remain the same, with a further 31% expecting them to increase over the next six months (up from 27% the previous quarter).
- Over the past six months, 75% of respondents have experienced no void periods, up from 71% in Q4 2004.
- Over the past year, 83% have experienced either no void periods or periods of up to a month. 89% expect void periods to be the same or to decrease over the next six months.
- Compared to the previous six months, 76% either feel the same or more positive about their buy-to-lets (up from 65% in the last quarter).
- 83% have said demand for rental properties is either the same or increasing (up from 77% the previous quarter).
Andrew Moss, product development manager for Mortgage Express, says: “Our survey reveals that landlords’ confidence in the buy-to-let market remains strong. Low void periods, consistent demand for rental properties and the belief that rent levels will stay the same or will increase has meant many are now planning to expand their portfolios within the next few months.
“There has been a lot of debate recently about what impact a more muted property market would have on the buy-to-let sector and this comprehensive study shows that the outlook for buy-to-lets remains positive.”
The South remains the most popular area for buy-to-lets (62% of landlords currently have properties there) reflecting the structure of the UK rental market. This is followed by Wales and the Midlands (23%), Scotland and the North (18%). When looking at where investors are thinking of buying, however, there’s more equilibrium: 26% are looking to add to their portfolio in the North/Scotland; 25% in the South; 18% in the Midlands and Wales and 15% overseas.
Moss continues: “The South remains the largest market but the North East and Midlands are also growing in demand. In addition, overseas locations are becoming increasingly popular. This is perhaps because many landlords, having built up experience in their home market, now feel confident to test the water abroad.”
The majority of buy-to-let investors are male (65%), however, over the last few months there has been an increasing number of women entering the market (35% - up from 23% the previous quarter). The vast majority of landlords are experienced, with the average length of time in the business being just over 6 years. Around 20% have been letting property for over ten years. The majority of investors are aged between 35 and 64 (83%).
Moss concludes: “This illustrates that most buy-to-let investors have been in the sector a long time, have a great deal of experience and are in it for the long-term and therefore won’t be unduly concerned about a quietening property market. Indeed, many are in fact very positive about the UK buy-to-let market this year and believe rental levels will increase over the next six months.”
