65% of landlords plan to add to their buy-to-let portfolio
Despite constant concerns over mortgage interest rates and the overall health of the UK's property market, the buy-to-let industry has thrived over the past few years and shows no signs of stagnating. A new property investor survey by buy-to-let mortgage broker, Mortgages for Business, has found that around 65% of UK landlords plan to increase their buy-to-let portfolio by at least one property in the next six months.
This figure is in stark contrast to that recorded in November 2014, when only 55% of landlords were looking to add to their buy-to-let portfolios, further proving that the property market is very much on the up. The survey also documented whether landlords are planning to sell any of their properties, with only 8% saying they currently intend on reducing their portfolio size; 27% of landlords also had no plans to either grow or reduce their buy-to-let portfolio.
Out of the 65% of landlords looking to purchase a new buy-to-let property, 17% are considering purchasing a HMO property, while 13% are considering a semi-commercial property, and 10% are planning to buy multi-unit freehold blocks.
How do landlords plan to fund this expansion?
Obviously, the more buy-to-let property landlords buy, the more mortgages they'll need, and the survey revealed how landlords are thinking about how to finance borrowing. Around 26% of those surveyed would prefer a variable rate mortgage rather than a fixed rate mortgage, which represents a 3% increase on the figures posted in November 2014. 22% of landlords would prefer a two year fixed rate mortgage, while 12% would go for a three year fixed rate deal. However, around 30% would still rather the security of a five year fixed rate mortgage, and 10% of landlords would even prefer a ten year fixed rate deal!
In terms of landlords' average loan-to-value (LTV) ratios, these have fallen since November 2014, from 57% to 54%. What's more, the percentage of landlords borrowing above 75% LTV has fallen to around 12% from 16%.
Landlords aren't happy with mortgage lenders
Despite the increase in the number of landlords looking to add more buy-to-let properties to their portfolios, around 30% of landlords are unhappy with the level of support mortgage lenders are giving to property investors. 20% of landlords believe mortgage lenders should be lending more to investors, while 20% feel lenders should reduce interest rates further, despite them currently being at a record low.
However, the biggest complaint landlords have with mortgage lenders is with lending criteria: 57% of landlords feel lenders should be less rigid in their selection of borrowers. Currently, 41% of landlords in the UK have no external income above £25,000 per annum, and this lack of non-rental income means many professional landlords are unable to take advantage of certain mortgage products.
Are you a landlord in Cardiff looking to expand your buy-to-let portfolio? If so, contact CPS Homes today. We can help you find the perfect property for your investment and have previously helped hundreds of landlords achieve the best possible return on their investment. We can also help you prepare for the Rent Smart Wales legislation coming into effect this autumn, which will force landlords to register themselves and their properties with the licensing scheme whether they use a letting agent or not.
