Despite many commentators predicting the BTL market would either remain steady or show a slight decline, Mortgage Trust claims 30 per cent of landlords are looking to expand their portfolios in 2006; almost double the amount at the beginning of 2005.
This confidence in the BTL market is attributed to stable interest rates and the continued growth of property prices, with 83 per cent of landlords thinking prices will rise by 2 per cent or more in 2006.
Nicola Severn, marketing manager at Mortgage Trust, said: “With favourable borrowing conditions, healthy rental demand and an expectation of steady house price rises among investors, the outlook for the buy-to-let sector is very favourable indeed.”
Overall, the Mortgage Trust survey believes landlords will increase their portfolios by 14 per cent over the next 12 months.
Despite relatively good rental yields, expected to be around 5.8 per cent of property value, most landlords see their properties as investments for the future.
With pensions still a hot topic of debate, 73 per cent of landlords said their portfolios were there to provide for their future and a massive 88 per cent said the recent government decision not to allow residential property in Self-Invested Personal Pensions (SIPPs) hasn’t affected their willingness to invest in BTL.
Mike Woodfine, director at The Money Centre, said: “The SIPP would have been a nice tool and we were all geared up to take advantage of it. However, people will still go into the market and a lot of people have been sitting on deposits gained from other investments. We are expecting the outlook to be very positive.”
