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Recent Survey Reveals Buy-To-Let Optimism Towards Yields, Demand, & Future

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    How do BTL Investors Feel About the Current Market?

    There may be some uncertainty about the UK economic climate, but a recent report concerning landlord sentiment has shown a surprising lack of negative feelings towards buy-to-let investments and the broader market.

    A Mortgage Solutions survey found that 36% of landlords felt optimistic about the future of their buy-to-let property. Out of these positive respondents, the strongest sentiment was expressed by landlords with property portfolios made up of 11 to 20 properties. Next were landlords with 4 to 11 investment properties.

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      Why are Landlords Feeling Positive?

      Those surveyed gave diverse reasons for their optimistic outlook, including “high demand, high yields, and continued investment opportunities.”

      As experts reported, these sentiments echo the UK property market’s current characteristics. The UK rental market has been experiencing unprecedented demand in recent years as more people turn to renting rather than buying, making for good conditions for buy-to-let investing.

      According to Fleet Mortgages, average rental yields in England and Wales had an annual rise of 0.3%, bringing the overall average yield to 6.9%. This is a decent yield spurred on by rapidly rising rents and the availability of affordable property for those willing to search for a good deal. These figures back up landlord optimism when it comes to UK rental yields. In particular, buy-to-let flats are becoming increasingly popular due to the lower initial investment costs needed compared to a house.

      Mortgage Solutions also reported that some of those surveyed put their optimism down to the fact that they are investing long-term and are not phased by the short-term fluctuations the market will inevitably experience. In fact, the buy-to-let market has remained resilient throughout various crises and governmental shake-ups.

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      Many Landlords Taking a ‘Wait and See’ Approach

      While 36% of landlords felt optimistic, the largest percentage of respondents felt neutral, coming in at 40%. Looking at the UK market conditions and economy, many people think this is a time of uncertainty.

      When asked about the future of the UK economy, 51% of respondents replied that they felt neutral. It seems many are taking a ‘wait and see approach’ at the moment. With an upcoming general election and uncertainty surrounding Bank of England policy and interest rates, some are finding it challenging to plan ahead confidently.

      However, less than a third felt pessimistic about the UK economy, according to the Mortgage Solutions survey, while 19% felt positive rather than pessimistic about the future; many landlords are taking a pragmatic and realistic stance while thinking long-term about their investments. Why not learn more about property investments in the UK with answers to questions such a, Can a foreigner buy property in the UK?

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        More Reasons for Optimism in the Buy-to-Let Market

        While it’s true that there’s currently some uncertainty when it comes to the UK’s economic climate, the buy-to-let market is showing several signs of resiliency.

        As mentioned, the chronic undersupply of available homes has led to exceptionally fast rental growth and almost guaranteed demand.

        There are no signs of this letting up any time soon, as UK rents are believed to continue increasing in the coming years, with property experts Savills believing that rent prices will grow 18.1% over the next five years.

        In fact, Savills has identified buy-to-let in the North West of England as one of the few property investment sectors forecast to bring in over 8% returns in 2024. With a predicted return of 9.2%, it could be called one of the best things to invest in right now for long term.

        There may be some uncertainty in the broader UK economic climate currently, but there are plenty of promising signs when it comes to the buy-to-let market.

        To learn more about UK property investment, read some of our latest buy-to-let area guides:

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        Jessica Ferris

        Jessica is a property content writer at RWinvest. Keeping a close eye on the UK property market, Jessica helps our readers stay informed and up to date on the latest market news and statistics.