Survey bucks trend by showing buy to let investors ready to expand

A new survey appears to buck the trend of recent rental market snapshots by showing that buy to let investors are likely to expand their portfolios, rather than sell off some properties.

A new report by specialist lender Aldermore shows that 41 per cent of portfolio landlords - those with four or more buy to let properties - want to expand those portfolios over the next 12 months.

Some 25 per cent say changes in tax relief are their main challenge, while 22 per cent highlight increased stamp duty; and 17 per cent say they will increase rents to cover the higher costs incurred by landlords.

The survey also suggests more optimism than previously reported: some 44 per cent believe the private rental sector will grow.

Only eight per cent of private landlords intend to reduce the number of properties they own: when asked why, many cited too many restrictions and higher taxes while some believe that tenants are protected to the detriment of the landlord.

“We are pleased and slightly surprised to see that there remains a net sense of optimism amongst buy to let landlords. Despite the recent changes, many still view buy-to-let as a good investment, with expansion on the horizon, particularly amongst those who are specialists in this area” says Charles McDowell, Aldermore’s commercial director. 

However, many of those questioned admit to worries over their investments.

One in four state the changes in tax relief as their main concern, while one in five believe it is increased stamp duty and one in seven chose the growing pressure on yields. 

A further one in seven believe it is a pressure on rent and over one in 10 say there’s increased competition in the market which is proving challenging. 

When asked how they intend to deal with these challenges, one in six say they will increase rents to cover the higher costs, while a further one in six will sell some of their properties. One in 10 will reduce the value of their buy to let mortgages so they are borrowing less.

One in seven landlords who are not expanding their portfolio are planning to remortgage some or all their properties. The main reason is to mitigate any interest rate rises.