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Landlords ‘planning to purchase’ jumps from 3% to 11%
For some time, there has been a widely-held opinion that a significant number of landlords are seeking to make their exit from the private rental sector (PRS), forced out by higher rates, greater costs of running properties, and taxation policies which impact on overall profitability.
Data
Our recent BVA BDRC research of landlord intentions, when it comes to their portfolios, revealed that – in the last quarter of 2024 – the number of landlords planning to purchase had actually increased by 3% to 11%.
19% of those with larger portfolios said they planned to acquire over the course of this year. There is a fundamental here that seasoned portfolio landlords will be acutely aware of, and it comes in the form of ongoing demand for tenancies, against the backdrop of a rising population who might wish to own their own homes, but are having to wait longer to do so, due to a combination of property supply shortages, high house prices, mortgage costs, income levels, etc.
That will lead many landlords to acknowledge that long-term property investment in the PRS is unlikely to lead to too many void periods, poor rental returns – even with higher mortgage costs - or a drop in the number of tenants seeking properties.
We see portfolios landlords much more interested in HMO properties or multi-unit blocks, because they are able to see the larger yield achievable.
Why use Solutions by Foundation for MUBs and large HMOs? Find out here.
Specialist Knowledge
Specialist knowledge, as both an adviser and a lender, can be crucial here because for the HMO/MUB ‘newbie’ there are a lot of different things to think about, in terms of licensing, room size, exits, shared communal areas, and everything else.
We include standard HMOs (less than 6 bedrooms) in our Buy to Let by Foundation proposition, and for the MUBs and larger HMOs, and even part-commercial properties with flat and shop combos, we launched a specific ‘Solutions by Foundation’ product brand, specifically for these buy-to-let product options that are beyond the vanilla, and it’s also why advisers need to be fully aware, not just of the various product options in this space, but how the client’s specific needs are going to point them in a specific direction.
Overall, we anticipate portfolio and professional landlords who are in this for the long-term, are not going to be put off by the greater complexity of these opportunities. They will need help and having a specialist adviser and lender available to them, will get them to where they need to be in a much quicker timeframe and with the right finance behind them.
Register with Foundation Home Loans here.
This article was originally published on Mortgage Solutions
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