Buy-to-let landlords upbeat about market prospects
- 5th June 2018
- Landlord Property News
44% of landlords believe the private rental sector will grow in the next year
Despite recent changes to the sector, including buy-to-let stamp duty, landlords are upbeat about the future of the industry and still see the private rental sector as a good investment opportunity.
According to a recent report, 44% of landlords believe the private rental sector will grow over the next year. Additionally, 17% are looking to expand their portfolio.
The positive outlook comes as yields continue to exceed current saving rates and long-term trends continue in landlords’ favour. Demand for rental property remains high, and particularly in London. This has largely driven by “generation rent” millennials who move to the capital looking for jobs.
Another key finding from the report is that 41% of specialist portfolio landlords – those with four properties or more – are in a position to expand their portfolio over the next year. This shows that professional landlords are taking a long-tern approach and recognising the benefits on offer.
Research has shown that buy-to-let consistently produces yields of 3.5-4%, outstripping inflation (currently 2.6%), and has outperformed other assets on a risk adjusted return basis over 16 years, meaning it is potentially a less volatile investment.
For those landlords looking to further invest, it is important to know there are new rules governing the energy efficiency of rental properties that they will need to be aware of. The rules came into force in April and require properties to meet certain energy performance standards.
Meeting these standards is also important for attracting tenants. A recent report found that 42% of tenants consider how eco-friendly a building is when choosing a rental property, rising to 50% for those looking to rent in London.
Our view is that maintaining high standards will help attract more quality tenants, leading to higher likelihood of long-term rentals and driving greater returns from increased rental and capital values.
Stephen Ludlow, Chairman at ludlowthompson, says: “It is good to see such optimism amongst buy-to-let landlords, with many planning on expanding their portfolios over the next year.”
“Although some landlords looking to expand may see new energy efficiency regulations as extra red-tape, in the long-run it will be beneficial. Ultimately, any measure that ensures high standards will help deliver higher returns through securing quality long-term tenants.”
It is good to see such optimism amongst buy-to-let landlords, with many planning on expanding their portfolios over the next year.
FREE & INSTANT PROPERTY VALUATION
IN JUST 60 SECONDS