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UK landlords power through despite BTL challenges

Buy-to-let (BTL) investors remain largely optimistic about the market in spite of Brexit uncertainty and increasing tax burdens for landlords, according to a survey conducted by Shawbrook Bank.

Its annual BTL barometer found 65% of BTL investors are confident about the performance of their property portfolio in 2018, while 14% say they are concerned.

This optimism stems from good tenant demand and high yields, with 21% of property investors experiencing an increase in tenant demand in the 12 months to March 2018.

“Property continues to offer an excellent underlying investment vehicle for professional landlords with the right investment strategy,” Karen Bennett, managing director of Shawbrook Bank Commercial Mortgages, said.

“While the investment case for BTL remains strong, there are particular challenges ahead for portfolio landlords and the additional impact of the PRA changes.”

The state of the UK economy has not dampened appetite to invest. Some 39% of landlords plan to invest in another BTL property in 2018, with the North West and South East said to be the preferred regions.

However, landlords still have a realistic outlook on the BTL market. With the UK showing little growth and the looming threat of Brexit, confidence in the economy is down from 47% in 2017 to 34% in 2016. In fact, levels of concern have risen from 33% in 2016 to 42% in 2017.

Bennett added: “There’s a healthy dose of uncertainty around at the moment, but the BTL market is showing its resilience.”

“Landlords now face much more stringent affordability tests and it’s therefore more important than ever that landlords are clued up on their obligations as the market continues to get even more complex.”

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