UK landlords bullish with 60% seeking to expand their property portfolios
20-07-2012
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Six in ten property investors plan to expand their portfolios by the end of the year and of those 84% are planning on purchasing residential investment property, according to specialist mortgage broker Mortgages for Business. It found the 60% want to expand and feel mortgage lenders should be doing more to support them.
The majority are planning to purchase more houses and flats by the end of the year, thereby increasing the supply of rental properties to help cater for demand which continues to outstrip supply.
Only 3% of investors are planning to reduce their portfolios over the next six months, down from 6% last quarter.
‘Landlord appetite for buying residential property is high. This will support the private rented sector and ease the strain on would be renters chasing too few properties,’ said David Whittaker, managing director at Mortgages for Business.
The firm’s research also shows that complex buy to let property is becoming increasingly popular probably due to the more attractive yields compared to vanilla buy to let properties. Some 25% of respondents said that they were considering purchasing either HMOs, multi-units or semi commercial property, or a combination of the three.
When it comes to lenders their main gripes were with rates, fees and LTVs. Landlords are looking for buy to let mortgages that cater for more specialist scenarios including more products for limited company applicants, products for holiday lets and more lending to expats.
Landlords were also interested in seeing more case by case underwriting rather than computer based lending decisions.
Just over half, 54%, of investors who are planning to expand revealed they will need to refinance their existing properties. Of these, 20% are likely to struggle to secure finance because of a lack of equity, reflecting the dearth of high LTV mortgages in the market.
Some 8% revealed they have been asked by lenders to refinance elsewhere, largely as a result of RBS which is looking to reduce its exposure to property and Bradford & Bingley which is looking to exit the market entirely.
‘Landlords are bullishly confident about the prospects of the buy to let market over the next six months. There are a huge number of would be owners being displaced into the rental market every year, which has kept tenant demand sky high and pushed yields on private rental property over the 6% threshold,’ explained Whittaker.
