Over half of landlords expect to expand portfolios next year

More than 50 per cent of landlords questioned in a study carried out by PropertyLetByUs say they are planning to increase their portfolio size in 2015, offering positive news for the industry

The survey cites decreasing rent arrears, an increased demand for tenants, and strong rental profits as reasons for the high levels of confidence reported amongst landlords who are hoping to invest in additional properties in the New Year.

PropertyLetByUs managing director Jane Morris outlined her own predictions for the market over the next 12 months in response to the survey.

She highlighted that home ownership has dropped to its lowest level in 25 years and explained that as property prices continue to rise, tenant demand is expected to grow. This will support the buy to let market during the coming and year and beyond.

She commented that over the course of the last 12 months, the organisation has seen a ‘huge surge’ in the number of landlords using their website and noted specific geographic preferences in trends.

As usual, properties in the South East and the English Capital were particularly appealing to prospective landlords with the North also experiencing a high level of interest due to high potential yields.

The survey also revealed that 50 per cent of landlords took rental earnings of between six and eight per cent from their properties whilst another 10 per cent have seen returns of over eight per cent. The remaining 40 per cent achieved four per cent profit.

When it comes to equity, a third of the landlords taking part in the survey claimed a loan to value ratio on their property of 30-40 per cent, and only 25 per cent plan to sell part of their property portfolio next year instead of continuing to rent.

These findings have arisen shortly after a study from Paragon Mortgages revealed 41 per cent of landlords believed demand from tenants to be on the up in this year’s Q3.

Director of mortgages at Paragon John Heron also stated that gross lending within the buy to let market could hit £25 billion before this year comes to a close if figures remain stable.

Want to know more about the Buy to Let market? See the results of our own studies about the health and data of the market.