Landlords still backing buy-to-let

The latest research from London lettings and estate agent, Benham and Reeves, has revealed that more than half of landlords (50.6%) still believe residential property remains a good long-term investment despite increased regulation, with almost two-thirds (62.7%) intending to maintain their current portfolio over the next year. However, just 3.9% plan to expand, with landlord taxation ranking as both the biggest barrier to further investment and the number one change that would encourage landlords to invest again.

 

The survey found that: –

 

Landlords still believe in buy-to-let

  • Despite the challenges facing the private rental sector, 50.6% of landlords believe residential property remains a good long-term investment, even in the face of increased regulation.
  • However, confidence in the wider future of the private rental market is more subdued. Some 39.1% of landlords state that they are either somewhat or very unconfident about its long-term future, compared to 33.9% who remain confident.
  • Profitability is also a concern, with 38.9% expecting the profitability of their buy-to-let portfolio to decrease over the next 12 months, more than five times the 7.6% who expect it to increase. A further 45.8% expect profitability to remain unchanged.

 

Landlords holding rather than expanding

  • Almost two-thirds of landlords (62.7%) intend to maintain their portfolio at its current size over the next 12 months, suggesting that the majority are not looking to abandon buy-to-let despite the challenges they face.

 

  • However, just 3.9% intend to expand their portfolio, while 13.0% intend to reduce their holdings and a further 14.2% plan to exit the rental market entirely.

 

Around eight in 10 say buy-to-let is less attractive

  • Despite half of landlords continuing to believe in property as a long-term investment, there is little doubt that the appeal of being a landlord has diminished.

 

  • More than three-quarters (78.5%) believe being a landlord today is a less attractive investment proposition than it was five years ago, with 51.9% stating it is much less attractive.

 

Taxation is the biggest barrier to further investment

  • When asked what currently prevents them from investing more in rental property, landlord taxation ranks as the biggest barrier, cited by 28.3%.

 

  • This places taxation considerably ahead of the Renters’ Rights Act and wider regulation at 15.1%, while property prices rank third at 12.6%.

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