The data outlined not only increased general confidence levels but a greater willingness from landlords to purchase property, potentially re mortgaging in order to fund this, and the greater likelihood they will utilise limited company vehicles.
While this survey was completed pre-lockdown 3, landlords appear to have grown more optimistic the further we progress from the first lockdown. Four out of five ‘Optimism indicators’ based on landlords’ outlook over the next three months increased between Q4 2019 and Q4, 2020 – those being their positivity around the prospects for capital gains, rental yields, the UK private rental sector, and their own letting business.
Overall, this increased optimism meant that landlord confidence rose and much of this arose from increased tenant demand. The research added that 32% of landlords had witnessed tenant demand increase in the previous three months, the biggest proportion in nearly five years, and this has led some landlords to look at expanding their existing portfolios.
As such, 16% of landlords intend to purchase more properties in the next 12 months – up from 15% in Q3; and while 20% said they would decrease the number of properties they own over the same period, that figure had dropped from 25% in Q3. From a regional perspective, landlords in the North West, Wales, West Midlands and Central London were the most likely to be adding to portfolios, and of those 16% who intend to buy, the average number of properties they intend to buy is just over two.
It is impossible to predict the future, and we can’t yet know how this latest lockdown might change landlords’ plans, but at the moment it seems a significant minority will continue to seek expansion of their portfolios and will require mortgage finance to do so. That is good news for advisers and rest assured that we will be on hand to support you in helping those landlord clients with their next steps, whatever they might be.
FOR INTERMEDIARIES ONLY