Buy to Let Property Investors Optimistic About Sector

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Buy to let property investors remain optimistic about the prospects for the sector in the coming year, despite growing uncertainty surrounding Brexit and increasing landlord tax burdens.

65 per cent of buy to let investors are confident about the performance of their property portfolio in 2018, according to research by Shawbrook Bank in its annual buy to let barometer. The survey records the current and future sentiment of professional landlords.

A mere 14 per cent of landlords are concerned about the performance of their portfolio throughout the rest of the year.

The main drivers of optimism amongst property investors are good tenant demand and high yields. 21 per cent of landlords are experiencing an increase in tenant demand in the 12 months to 2018.

However, although landlords are optimistic, they are also realistically assessing the challenges they will face in the near and longer term. The UK is currently showing lacklustre growth and uncertainty surrounding Brexit. This has lead to a lack of confidence in the economy, with optimism falling from 47 per cent in 2017 to 34 per cent in 2016. Levels of concern are on the rise, from 33 per cent in 2016 to 42 per cent in 2017.

However, despite slightly weaker growth in the UK economy, there remains a strong appetite for investment. 39 per cent of landlords aim to invest in another buy to let property in 2018. The North West and South East cited as the most popular regions.

Managing Director of Shawbrook Bank Commercial Mortgages, Karen Bennett, explained: ‘There’s a healthy dose of uncertainty around at the moment, but the BTL market is showing its resilience. Property continues to offer an excellent underlying investment vehicle for professional landlords with the right investment strategy.’

She continued: ‘While the investment case for BTL remains strong, there are particular challenges ahead for portfolio landlords and the additional impact of the PRA changes. Landlords now face much more stringent affordability tests and it’s therefore more important than ever that landlords are clued up on their obligations as the market continues to get even more complex.’

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