New research has revealed that approximately two thirds (64%) of UK landlords are optimistic about the outlook for the residential buy-to-let sector over the next three years despite ongoing Brexit uncertainty.
Of this, 13% are ‘very’ optimistic when it comes to investment growth and strong yields.
The findings, commissioned by specialist property lender Cambridge & Counties Bank, showed that a sizeable proportion of landlords are using the current market volatility to their advantage by expanding their portfolios. Some 19% of those surveyed are seeking to grow their portfolios by a third, while 11% are keen to double it over the next three years. By contrast, only 19% of landlords are looking to sell.
However, despite this strong showing of optimism, Brexit is still a key concern for property sector professionals. Two fifths of landlords conceded that it is top of their list of worries, with Brexit being seen as a bigger risk than an increase in interest rates (cited by 32%), rising levels of tax (32%) and a lack of confidence in the stability of lenders (also 32%).
Although the buy-to-let sector is viewed most positively, a similar number of landlords (61%) have favourable sentiment towards student accommodation in terms of growth, with 16% being ‘very’ optimistic when it comes to this fast-growing area of the market.
As well as growing their property portfolios, most landlords say they will also be refurbishing their buy-to-let and investment properties, with an average spend of £10,000. In fact, 11% of respondents to the Cambridge & Counties Bank study revealed they would spend more than £20,000, with 4% even forecasting they would invest over £50,000 in their portfolio.
In addition, the research highlighted a growing concern among landlords with regards to the financial stability and strength of their banking partners. Just 20% of those surveyed said they were very confident of their lender’s stability, with 18% of landlords saying they are ‘not confident’ given recent announcements of funders going into administration or closing their books to new business.
“Cambridge & Counties Bank has seen a steady stream of borrowers switching from other lenders, often recommended by the intermediaries and brokers we work closely with on a daily basis,” Simon Lindley, chief commercial director at Cambridge & Counties Bank, said. “We are actively focused on becoming the bank of choice for professional property investors and landlords, and will capitalise on the record set of results we posted for FY2018 and the momentum we have across the UK to grow our market share further.”