Landlord Activity Shows Some Stability Returning to UK Housing Market
The Zoopla UK House Price Index for October shows that 4 in 5 local housing markets saw annual house price falls.
High-interest rates, falling house prices and uncertainty regarding the government’s long-term vision continue to capture the UK property market headlines. However, Landbay’s most recent survey reveals that approximately a third of buy-to-let landlords have their sights set on expanding their presence in the private rental sector.
Read on for more information on how this affects buy-to-let property investment in 2023.
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What Did the Survey Show About Landlord Intentions in the UK Buy-to-Let Market?
Of these landlords who said they would buy in the near future, a substantial 78% are actively growing their property portfolios. Regarding their motivations, 38% say the rising number of tenants them, while the possibility of a decline in house prices entices 34%.
The prospective buyers largely fall into the category of portfolio landlords, with 44% owning 11 or more properties and an additional 26% possessing between four and ten properties. However, smaller-scale landlords are also exploring purchase options, with 30% owning one to three homes.
In terms of regional trends, more than a third of existing landlords in the North, Midlands and the East of England expressed their intention to acquire another property within the next 12 months. In contrast, less than a quarter of landlords in London and the South plan to do the same.
This is most likely due to the higher property prices in the south of England. More northern parts of the UK, such as the North West, have cheaper properties, as well as good capital growth predictions and rental yields. For instance, Liverpool and Manchester have an average yield of 7% and 8.5%, respectively, with certain postcodes in those cities yielding even better ROI than that. Learn more about what to invest in right now in 2023 – 2024 with our free property investment guide.
A quarter of landlords (25%) remain uncertain about their future plans, but some indicated they would consider further purchases if they found a suitable opportunity.
The survey also identified that 43% of landlords wanted to avoid buying more properties, citing financial constraints, rising interest rates, and government initiatives like the Renters Reform Bill, creating uncertainty with regulations and landlords.
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What Did Landbay Say About the Survey?
Landbay’s business development director, Rob Stanton, said:
“Despite the various pressures buy-to-let landlords are facing, there is still an appetite for further house purchases.
“We know there is a big demand for rental property, and this is one of the reasons landlords are actively looking to expand their portfolios.
“They are also keeping an eye on falling house prices and other landlords selling up.
“While it is true that higher interest rates are putting off some landlords, for others, there are opportunities out there. This is more noticeable in the Midlands and the North of England, with the South typically more expensive, proving less popular for property purchase.
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