Research by bridging finance lender mtf has found that a third of UK property professionals are set to expand their portfolios in 2018, with an appetite for opportunistic deals remaining strong despite a rising number of challenges.
The poll of 109 property professionals – part of mtf’s research into the future performance of the UK’s property sector – revealed that 33% of investors planned to grow their portfolios in the coming year, while half (50%) said they planned no changes in 2018.
None of those questioned said they had plans to reduce their portfolio or withdraw completely from the UK property market in the next 12 months.
Of the 33% looking to increase their portfolios, some 60% are aiming to purchase in the South East, while 20% said they are eyeing up properties in the capital. This comes as investors seek to diversify their portfolios from a geographical standpoint, moving away from higher value properties in London where rental yields are typically more squeezed.
Meanwhile, some 40% of respondents don’t believe conditions for landlords and property investors will improve in 2018, which makes the number who are still willing to expand their portfolios an encouraging sign.
Property investors were faced with a number of significant hurdles to overcome in 2017, not least the phasing out of mortgage interest tax relief and the uncertainty surrounding Brexit and a general election. This followed on from the introduction of an additional 3% stamp duty surcharge on buy-to-let homes in April 2016.
Some 43% of investors and landlords cited this additional stamp duty charge as the biggest challenge they faced last year, with economic uncertainty (influenced heavily by Brexit and the snap general election) deemed to be the second biggest challenge (21%). New affordability rules were in third place (16%), while 15% said accessing funding was the hardest challenge and 5% said the phasing out of mortgage interest tax relief was their biggest hindrance.
Throughout 2017, 45% of those surveyed purchased residential properties as investments, while 21% bought foreign homes and 11% purchased commercial properties as investments.
“While there is continuing uncertainty, particularly over how the Brexit negotiations will unfold, UK property investors remain resilient,” Tomer Aboody, director of mtf, said.
“The fact that property professionals have continued to invest in the UK, despite the uncertainty and numerous challenges, bodes well for the future of the market. Bridging finance is there as a tool to help investors fulfil their requirements when looking to purchase properties quickly and increase their portfolios.”