One in seven UK landlords are looking to expand buy-to-let portfolios
The buy-to-let sector is professionalising as more landlords look to increase their portfolios, with a renewed focused on property investment hotspots. Specialist lender Precise Mortgages has revealed research highlighting UK landlords’ acquisition plans for 2020. One in seven landlords plan to expand their portfolio within the next 12 months, showing some landlords are looking to purchase additional properties despite recent tax and regulation changes. The north-west is expected to be the busiest region for landlords as more than one in five landlords plan to buy in this area in the next year.
The south-east and Yorkshire & The Humber followed with 16% of landlords looking for new properties in these regions. Alan Cleary, managing director of Precise Mortgages, commented: “The increasing professionalisation of the buy-to-let market means landlords are becoming more focused and selective in where they buy properties and how they fund their purchases." “Recent rate cuts across the buy-to-let market are highlighting the opportunities to increase portfolios and profitability as well as underlining the need for expert advice from brokers particularly among landlords with bigger portfolios.
” North-west becoming hotspot for investment The north-west, especially Manchester and Liverpool, is home to high rental yields and strong rental demand. Additionally, the region is forecast to see the most significant increase in property prices over the next five years with new exciting investment and developments in the pipeline. There are also smaller cities across the north-west seeing strong growth, such as Preston and Bolton. With easy access to Manchester and billions of pounds worth of regeneration projects, the two cities are further boosting the region as a top property investment hotspot.
Buy-to-let mortgages Precise Mortgages’ research also revealed that 68% of landlords and investors that are looking to expand their portfolio are planning to fund their next investment with a buy-to-let mortgage. And 18% are expecting to release equity from existing properties, which is the most common among landlords with 11-plus properties. Another recent study showed the buy-to-let mortgage sector has been buoyed with falling mortgage rates in recent months. Brokers are expecting the market to become even more competitive as one in five mortgage lenders are set to introduce more buy-to-let business this year.
Professionalisation of buy-to-let sector With 176 rules and regulations in existence for landlords, the buy-to-let sector has been partly forced to professionalise, especially for landlords who want to manage their own properties. As more new changes come into play, it’s becoming more difficult for landlords to look at buy-to-let as just a hobby. More landlords than ever are starting to buy properties for their portfolio through limited companies, which can provide favourable tax rates. This shows more landlords are looking at their property investments as a full-time business, and the buy-to-let sector is expected to continue to show signs of further professionalisation.