As 2012 draws to a close, it is fair to say that it has been a good year for buy-to-let landlords. With first time buyers still struggling to obtain a mortgage or save sufficient deposit, they have had a large number of prospective tenants for their properties. This competition amongst tenants has continued to drive up the price of monthly rentals. A survey by CHL Mortgages indicates that buy-to-let landlords remain optimistic for their prospects in 2013.
Almost 71% of landlords have a positive outlook for what the coming year has in store, compared to just 4% who feels that 2013 will not be a good year for business. These feelings of optimism have remained stable since the last two polls by CHL Mortgages conducted at six monthly intervals. A third of landlords
plan to increase their property portfolio, a rise of 2% from when the question was asked in May 2012; if this holds true, this will outstrip the 18% of landlords in 2012 who bought new properties. Although a larger proportion – 56% – plan to maintain the size of their portfolio, only 3% plan to sell some of their properties in the year ahead. Purchasing buy-to-let property continues to be viewed as a stronger investment choice, with 62% seeing this as a safer investment over the next three to five years than stocks or shares or saving schemes. With yields greater than 7% common, high demand for rental properties and few problems with arrears, these factors are thought to have helped to promote the optimism felt by buy-to-let landlords. They are also in a stronger position than they could have expected to have been had they been asked two years ago where they anticipated to be now.
Good news for tenants
While economic uncertainty largely remains, the positivity shown by buy-to-let landlords indicates they remain confident in the property market. Not only are they more positive than others seeking to borrow such as first time buyers or those re-mortgaging their properties, but they are more optimistic than investors in general. As so many landlords plan to buy new properties in 2013, this is welcome news for lenders, as well as tenants who are finding it difficult to secure a property due to the size of the demand for somewhere to rent. With the extra rental properties that will hopefully be entering the market in the coming year, this should solve the problem of property shortages seen in 2012.
By Amy Millband