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40% of landlords plan to expand portfolios

Four in ten buy-to-let landlords are planning to expand their portfolio this year, according to new research from a UK property investment specialist.

A recent report by Experience Invest shows that 39 per cent of buy-to-let landlords are planning to add to their portfolio this year, compared to 11 per cent who intend to reduce theirs.

The survey of more than 500 buy-to-let landlords also shows that London, Manchester and Liverpool rank as the popular cities for buy-to-let investment in the UK.

In terms of the most popular cities, London (35 per cent) just beat Manchester (33 per cent) to take the top spot.

Liverpool (25 per cent) and Nottingham (15 per cent) came in third and fourth, followed by Bristol and Leeds, at 14 per cent and 13 per cent.

The rest of the top ten consisted of Birmingham and Newcastle (both 12 per cent), Luton (11 per cent), and a four-way tie between Brighton, Edinburgh, Glasgow and Sheffield (all 8 per cent).

Houses (67 per cent) were the most popular choice of investment, followed by flats (54 per cent).

Meanwhile, 39 per cent of respondents were keen to invest in new-build residential properties, while 24 per cent were interested in student accommodation properties.

Commercial (34 per cent) and semi-commercial (21 per cent) property were the other leading asset types among UK property investors.

Jerald Solis, business development and acquisitions director at Experience Invest, said: “In light of tighter tax regulations on landlords and on-going Brexit uncertainty, there have been some doom and gloom predictions about the future of the UK property market.

But today’s research shows that, as an investment asset, real estate is still hugely popular, with a significant number of property investors looking to grow their portfolio further in 2019.

“It’s interesting to see that, while London remains the most popular location for property investment, other regions across the UK are very close behind. In particular, the North West has established itself as something of a ‘hotspot’ for buy-to-let investors, with cities like Liverpool and Manchester providing strong rental yields and healthy capital growth.”

Source: Simple Landlords Insurance

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Buy To Let Investors To Increase Portfolios Over Next Year

The vast majority of buy to let investors plan to increase their portfolios over the next twelve months, despite the uncertainty of Brexit and other potentially challenging government measures.

A survey by investor forum and advice website, The Property Hub, has found that almost 80 per cent of landlords plan to increase their portfolios over the next 12 months. This equates to around 1.95 million investors.

The new survey found that most landlords plan to purchase at least one more property next year, with 70 per cent stating that even a no-deal Brexit will not put off their plans.

Buy to let investors also overwhelmingly confirmed in the survey that the mass exodus predicted from the private rental sector will not happen, with 84 per cent saying that they had no plans to sell properties, and 66 per cent confirming that even if the government were to announce further tax measures – such as restricting interest relief for companies, they still wouldn’t be selling up.

Co-founder of The Property Hub, Rob Dix, commented: ‘There’s been so much talk of a mass exodus of landlords and the death of buy to let, it’s easy for some would-be landlords or, indeed, tenants, to believe the rental market is on its knees. However, it’s clear from our survey that landlords are far from retreating from the market.’

The government proposal for mandatory 3-year tenancies is also not putting off buy to let investors.

When asked what would need to happen in order for them to support this policy  82 per cent said they’d need a way to remove tenants who fall into rent arrears that is faster than the current fault-based method, 69 per cent said the ability to increase rent would need to be given, and 59 per cent said there’d need to be tax incentives, like the ability to deduct more mortgage interest.

Less than 9 per cent of the investors polled said they would oppose the policy regardless.

Mr Dix commented: ‘Getting good long-term tenants is the goal for any landlord so it’s not surprising that less than 9% of landlords would be against this policy regardless of any concessions. However, landlords obviously need to be protected too so it’s only natural that those operating in the sector are calling for some reassurance.’

Source: Residential Landlord

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Landlords nervous about adding to portfolios even in areas where rents are rising

Landlords are operating a “buy and hold” strategy with even areas with strong rental growth suffering from a dip in transactions, a proptech platform claims.

Online buy-to-let mortgage platform LendInvest’s second quarter Buy-to-let Index – which uses rental and house price data on Zoopla and transaction figures from the Land Registry – found that sales to landlords have slipped annually in all 105 postcodes it analyses.

This was despite annual rental growth being as high as 5.28% in areas such as Romford, Essex, and capital gains in Luton hitting 7.29% year-on-year.

The provider said its own data suggested landlords were focusing on remortgaging rather than adding to their portfolio with new buy-to-let mortgages.

However, LendInvest said many landlords will now be at the end of two-year fixed rate deals they took out ahead of the introduction of the extra Stamp Duty charge in April 2016, so are likely to be weighing up their options – which could boost transactions.

Ian Boden, sales director at LendInvest, said: “It’d be so easy to look at the underlying data that tells us transaction volumes are down and make dire predictions about the health and wealth of the rental market.

“Instead, what our index proves once again is that looking at one metric in the housing market is never enough. One metric on its own can’t clearly define the performance of a city’s property market.

“Each of the very top performing buy-to-let locations this quarter is experiencing a slowdown in transactions – substantial falls in places, dips in others.

“But the best places this quarter continue to outperform the competition well thanks to strong performances on other equally important metrics like rental yield, capital gains and rental price growth.

“Data from the index, UK Finance and our own experience as a mortgage lender strongly suggests that right now a ‘buy, hold and remortgage’ strategy is some investors’ preference while the market works through a possible slowdown.”

Top 10 buy-to-let postcodes

Yield Capital gains Rental price growth Transaction volume
Luton 3.91% 7.29% 3.70% -6.15%
Colchester 3.63% 6.33% 4.77% -6.73%
Romford 4.09% 4.99% 5.28% -7.84%
Birmingham 4.55% 5.00% 3.66% -6.46%
Manchester 5.36% 4.38% 3.71% -7.35%
Cambridge 3.26% 4.57% 4.76% -6.63%
Northampton 3.99% 6.59% 2.17% -7.36%
Bristol 3.83% 5.51% 2.75% -6.20%
Ipswich 3.42% 5.77% 2.76% -6.16%
Southend-on-Sea 3.62% 6.05% 2.53% -6.93%

Source: Property Industry Eye