Optimism abounds for UK's private sector landlords

06/07/2011

 

Optimism abounds for UK’s private sector landlords
Recent figures released this week show that landlords dealing within the buy-to-let market are extremely confident about the outlook within the private sector.
CHL Mortgages has just completed their most recent survey and found that an incredible 67% of private sector landlords are confident that after a few uncertain years the future now looks much more exciting. The demand for rental homes is the main catalyst for the optimism and 43% of those surveyed believe that it is much better to invest than it was just 6 months ago with income now able to easily cover mortgage repayments, maintenance and cost.
The survey also found that almost a third of landlords indicated that they were looking to expand their buy-to-let portfolios over the next 12 months. Finance is still inhibiting more landlords from expanding their rental homes with many citing the incredibly high deposits needed for buy-to-let mortgages as a reason to keep any optimism in check. Interest rates of course come in to play for a lot of investors and the survey also indicates that one in five respondents would consider fixing any buy-to-let mortgage in order to protect them from future interest rises.
This follows on from the news this week that mortgage rates have fallen to their lowest level in 23 years although many cynics argue that these great mortgage deals are only offered to those who can stump up large deposits – typically 40% or more.
The managing director of CHL, Bob Young believes that the survey shows that there is new optimism brought about by a number of underlying drivers.
‘Clearly, a lack of credit, tougher lending criteria and higher deposit requirements are suppressing residential property ownership for many, which is resulting in considerable pent-up rental demand a real positive for the private rental sector,’ he explained.
‘With uncertainty in the equity and bond markets we can therefore expect more investors to reconsider buy to let as an alternative asset class; even more so if property prices continue to fall over the next couple of years.
Emerging Real Estate’s own Tim Morgan believes this survey to be indicative of the current feel in the market place – ‘This recent survey is in keeping with the current feel of the buy-to-let market place. We are seeing more and more landlords who are positive about the future and they have a good reason to feel this way with the increase in rental demand making this the ideal opportunity to expand portfolios.

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