Buy-to-let intermediary forecast highlights confidence in sector
40% expect to do the same amount of business, with only 13% expecting to do less. This indicates that intermediaries operating in the buy-to-let market have an in-depth understanding of their clients, and appreciate that with strengthening rental demand and increased bargaining power many landlords are looking to add to their property holdings.
When asked which areas of buy-to-let are expected to generate this business, the intermediaries questioned expected a hefty 45% to come from experienced landlords growing their portfolios. This was closely followed by an anticipated 40% from buy-to-let borrowers re-mortgaging current properties. These findings clearly demonstrate that intermediaries operating in this sector have professional landlord clients who view their property investments with a hard business head, and who are not generally distracted by short-term fluctuations in the housing market.
A minority (15%) of business is expected from borrowers who are new to buy-to-let, this confirms that rather than being encouraged by market conditions, many speculative property investors are deterred by less attractive short-term returns.
When asked about the prospects for chargeable rents, 50% of respondents expect them to increase slightly and 38% expect them to remain the same. 81% of respondents also expect interest rates to remain static.
Chris Tonkin at ABC Buy-to-Let commented: ‘Existing buy-to-let portfolio landlords seem very bullish about current market conditions and are able to pick up both individual and portfolio property a competitive prices due to the general malaise in the housing market’.
Phil Ambler from Good Mortgages added: ‘Although interest rates have increased over the last 12 months and rental yields have decreased in certain areas, the buy to let market still remains buoyant. During the first quarter there tends to be a historical slow down in the housing market but remortgages tend to increase due to property renovation and refurbishment.’
Commenting on the findings Nicola Severn, Marketing Manager at Mortgage Trust said: ‘The first of our regular Buy-to-Let Intermediary Forecasts confirms that there is a cautious optimism in the sector. Buy-to-let intermediaries are experts in their market and are confident that their landlord clients are well placed to take advantage of increasing rental demand and cooling house prices by adding further properties to their portfolios and re-mortgaging to more favourable deals. With the housing market continuing to slow there is no doubt that short-term capital gains are no longer the driving force behind buy-to-let investment. At Mortgage Trust we believe that buy-to-let should be part of a long-term investment strategy and it is no bad thing that speculative investors are being deterred the lack of potential for short-term gains.'