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41% of BTL landlords plan to buy more

Journalist: Jake Carter, Mortgage Introducer

ended 17. July 2023

Despite expectations of a mass exodus from the rental market, many landlords are buying even more properties to expand their portfolio, according to the latest Landbay landlord survey.

Have you seen an influx of BTL customers intending to buy more?

Are the BTL customers intending to purchase more properties larger-scale landlords? What do they have in common?

Are smaller-scale landlords still exiting the market? How will the rental market be impacted if a lower number of landlords hold more of the properties?

8 responses from the Newspage community

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Editor
Michelle Lawson
Director at Lawson Financial
I think there is a difference when asked a question if you 'plan' to do something and if you are 'able' to do something. I am sure Landlords are 'planning' to buy more properties, particularly as prices do seem to be adjusting, however, the reality that shouldn't be ignored is if they are 'able' to obtain the finance due to rental coverage. Lenders are reducing rates to help with this however the trade off is a high arrangement fee which most add to the mortgage. Whilst this does have its tax benefits, if the property values fall and the mortgage is max'd out, this could cause issues later when the mortgage product expires. It is important for Buy to Let when gearing up to consider the lender offering at the end of the product as well.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
I think a Landbay survey will not be representative of the landlord market as a whole. Whilst landlords can still make margins work on Houses in Multiple Occupation (HMO) properties and holiday lets, where rents are higher; most standard residential landlords will be giving serious thought to downsizing their portfolios as the rents are not keeping up with their rising mortgage costs as their deals come to an end. Remortgaging to another lender is near impossible for most landlords due to the high stress tests being failed by the non-adjusted rental income, meaning a forced product transfer, or looking to sell the property.

Larger-scale landlords and those with unencumbered properties can play the averages and may look to expand if there are good deals to be had from landlords keen to sell, but many everyday landlords have seen any margin evaporate with the increased mortgage rates and the government's continued taxation attacks over recent years.
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Elliott Culley
Director at Switch Mortgage Finance
Landlords with established portfolio's are seeing an opportunity to purchase property at lower prices, taking advantage of smaller landlords exiting the market and first time buyers interest cooling with current rate rises. They have greater flexibility to raise funds on their existing portfolios, which makes it easier to buy property in the current market.
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Joe Stallard
Director and Advisor at House and Holiday Home Mortgages
With reports of landlords selling up and leaving the market that means those properties are up for grabs. Therefore some professional landlords will be taking the opportunity to expand their portfolios -- and this might be a good thing in terms of a recent tightening of regulations and rules around EPCs etc.

Looking on the positive side, those who are serious about property, you’d hope, are more likely to be quality landlords, providing quality housing for those that either can’t yet, or don’t want to buy.

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Russell Maggs
Mortgage & Protection Adviser at Maggs Financial Services
Buy to let landlords interested in investing for capital appreciation will continue to invest in my opinion. There is an opportunity for many to take properties with lacklustre EPC ratings, improve the home and add value, holding the property in their portfolio for years to come.

Investing in property for cashflow reasons will take a brief pause. But those with the money to invest will do so to diversify their portfolio and reduce their overall risk over a longer term.
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Ross McMillan
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
The predicted landlord sell-off hasn't happened yet. Most of them are playing it safe, holding onto their properties and hoping for better times ahead.

With cash flow being tight at the moment, landlords aren't eager to expand their portfolios. The government's strict regulations are more discouraging to them than the possibility of higher rental prices due to increased demand.

In Scotland, the additional dwelling supplement of 6% is another factor holding landlords back from making purchases. However, as prices seem to be softening, we'll have to wait and see if this inertia is just a temporary hiccup or a lasting impact on the UK rental market.
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Peter Stamford
Mortgage Expert at Stamford Home Finance
With interest rates climbing to levels not seen in a generation, many first-time buyers with sizable deposits have been completely priced out of the housing market. These individuals still need somewhere to live and currently the rental market is extremely competitive, so it comes as no surprise to me that the savvier landlords are expanding their portfolios. Supply and demand
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Austyn Johnson
Founder at Mortgages For Actors
Price drops = FTB & Landlords territory. Lets be positive though, it means the mortgage world keeps turning. If you dont charge fees, start. The proc fees are going to be a lot lower.