Nearly two thirds (60 per cent) of UK landlords are optimistic, both in terms of capital growth and rental returns, about the future performance of their property investments, research from Butterfield Mortgages Limited has revealed.
The research, which surveyed 501 UK landlords with buy-to-let mortgages, found that this level of optimism could be attributed to the Bank of England’s recent rate decision.
Over half (57 per cent) of respondents revealed tha the interest rate cut had a positive impact on their investments, while 58 per cent believe that BTL investments remain highly attractive in the current climate.
Butterfield Mortgages Limited CEO, Alpa Bhakta, said: “It cannot be denied that the BTL sector has faced considerable challenges in recent years, but our findings show that landlords remain eager to invest in the UK rental market. The sector’s resilience can be attributed to two key factors: string rental income and steady capital growth.
“Encouragingly, both of these indicators have shown positive momentum in recent months, suggesting that landlords’ appetite for investment will continue to grow as economic conditions improve. That said, brokers and lenders must be mindful of the challenges that lie ahead, particularly as we approach the Autumn budget."
Bhakta said as additional tax and regulation could well be introduced, landlords will need tailored guidance to navigate new hurdles.
She added: "Flexibility and bespoke solutions will be critical to the sector’s success going forward, so brokers and lenders need to collaborate to ensure borrowers have access to the financial products they need to thrive in the latter half of the year.”
Additionally, when asked about their investment strategies in the next 12 months, 38 per cent of landlords said they will increase the size of their portfolios while 49 per cent will maintain their portfolio’s size.
Meanwhile a small minority (10 per cent) will reduce the number of properties they own.
The research also found that over half (56 per cent) of landlords believe that the predicted exodus of landlords from the BTL market has been greatly exaggerated.
tom.dunstan@ft.com
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