Recent research has shown that buying property as an investment with the intention of renting it out is still an attractive proposition in the UK, especially when you take the long term view. This is according to a study recently published by Allsop, one of the UK’s leading independent property consultancies.
Their study reveals landlords are feeling a lot more optimistic about their private sector prospects than they were even just a year ago. Part of this optimism could be inspired by the fall in first time buyers sales, which could translate into increased demand for private rental properties, at least in the short term.
Landlords Anticipate Increasing Rents
The data collected by Allsop shows that 44% of the landlords they surveyed believed their own personal portfolio of properties to let had good or very good prospects over the coming quarter. Beyond that, another 37% remained positive in the belief that rents would continue to grow over the next six months.
Other data such as the Rent Check Report have indicated that landlords are struggling to create enough finance to expand their buy to let portfolios, with Allsop’s own research concluding that the percentage of their surveyed landlords who intended to buy more property at some point within the next year had dropped to 16%. Not a terrible figure by any means, but it is the lowest it has been for more than four years.
How much the uncertain Brexit negotiations are affecting the portfolio expansion ambitions of UK landlords is not revealed by the study.
Buy to Let Remains a ‘Stable and Attractive Sector’
One of the partners at Allsop, Paul Winstanley, confirmed the general optimism felt regarding the future of the UK buy to let sector. He said, “For those with equity to invest, buy to let returns still have the potential to outstrip savings accounts over the long term. Whilst tax changes and toughening lending criteria is challenging landlords, most are in it for the long term and we still only expect a small minority to exit as the tax changes feed through. With no quick solutions to the housing crisis, long term private landlords providing decent accommodation will continue to play an important role in housing our population.”
“As long as there are no new tax rises targeting landlords,” he added, possibly with the intention of being heard by our property-tax happy government, “Buy to let will remain a stable and attractive sector for the long term.”