The intentional rise of the portfolio landlord

We can all appreciate how late Q3 and parts of Q4 2022 may have shaken confidence levels across the housing and mortgage markets. However, we - as an economy and as an industry - have now emerged from what was an uncertain period and subsequent tricky transition into a higher interest rate environment to find ourselves in a much calmer, more stable and confident lending landscape. And with tenant demand proving to be extremely strong and rental yields remaining high, despite the obvious implications attached to the rise in mortgage costs, the private rented sector remains in a resilient and robust state.

During this challenging period, borrowers have leaned heavily on the advice process and, continuing the trend of the past few years, the professional/portfolio landlord have risen to prominence as the appeal of the BTL market appears to have diminished for a proportion of ‘accidental’ or more ‘unintentional’ landlords.

There may have been a perception that ‘accidental’ or more ‘unintentional’ landlords make up a high proportion of the landlords’ community.

In times gone by, accidental’ or more ‘unintentional’ landlords did make up a high proportion of the landlords’ community but the BTL sector has evolved and this was evident in the latest Q1 2023 BVA BDRC Landlord Panel research – in conjunction with Foundation Home Loans – which showed that becoming a landlord was an ‘intentional’ decision for the majority (70%) who are still active in the market.

The proportion of ‘intentional’ landlords increases in line with portfolio size. Landlords with a single property continue to be most likely to describe themselves as an ‘accidental’ landlord at 32%. 

On average, landlords predict they will stay in the PRS for another 9 and a half years. Single property landlords are most likely to stay in the sector for 1 year or less (at 18%) versus landlords with larger portfolios. Compare that with portfolio landlords owning between 11-19 properties where the number is between six and 10 years, while 33% of those with more than 20 properties say they’ll be here for another 20 years at least. 

This data helps demonstrate how portfolio landlords are likely to remain the dominant force within the BTL sector for the foreseeable future, mainly due to their longer-term commitment to a sector which has served them well in the past. And, despite some additional financial pressure, continued stability and increased confidence is likely to carry on serving them well in the future.

Try the rental calculator

FOR INTERMEDIARIES ONLY