Fears that landlords will precipitate a property crash by dumping their stock in the face of stagnating rents and increasing void periods in 2002-2003 are unfounded. Even though landlords were forced to subsidise mortgage payments on 17 per cent of all property held in their combined portfolios last year, 61 per cent of those surveyed said capital growth was more important to them than rental income. The evidence suggests landlords are therefore prepared to endure some short-term pain in order to benefit from growth in the longer term.
Regarding future motives for investment, 65 per cent of landlords are most interested in either capital appreciation or boosting their pension fund, while just 12 per cent intend to generate income from their property portfolio.
Commenting on the survey, Mark Harris, managing director of SPF, said: "The outlook for the buy-to-let sector is far more positive than the doom mongers would have us believe, as the motives of landlords for investing insulates the sector from a mass exit. For many buy-to-let investors, their residential property holdings are likely to have been their best-performing assets over recent years and they remain fairly positive. The sector is also likely to get a further boost from the ability to include new and existing buy-to-let properties in a personal pension from April 2006.
"As long as landlords do their research carefully before purchasing a new property, and ensure they don't overstretch themselves so they can make the repayments if they do suffer void periods, there is no reason why they shouldn't make a success of it."
