Landlord Confidence in Buy to Let Falls to Record Low
One of Britain’s leading buy-to-let mortgage lenders has lifted the lid on what landlords think about the lettings market for the first time.
The Mortgage Works (TMW) is the property investment arm of building society Nationwide.
The lender’s research for quarter 1 of 2020 shows landlord confidence in lettings has fallen to a record low, with just one in five feeling good about their prospects over the next three months.
The first TMW Buy to Let Barometer for the first three months of 2020 reveals:
- Landlords are most likely to sell (21%) than buy (12%) over the next 12 months
- 54% intend to buy their next investment property through a limited company
- 30% intend to remortgage their rented homes over the next year
Landlords consider the prospects for making a good return from their letting businesses are also at an all-time low.
Only 15% have confidence that they will make a capital gain on selling a buy-to-let home in the next three months, while only one in four feel they can maintain rental yields.
According to the survey, the typical private landlord has 7.7 properties, with 66% funding their portfolios with buy-to-let borrowing on an average of 5.4 homes.
The average rental yield across the UK is 5.3%.
The barometer also notes just 16% of landlords have seen an increase in tenant demand since the start of the year, while 24% report a fall and 33% no change.
The coronavirus pandemic has hit many landlords hard. The lender was told 80% have had a negative impact from the lockdown, with 43% expecting to suffer financial hardship, with self-employed landlords the most daunted, as 54% predicted they would face severe hardship.
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Investing in a private rented property can be achieved in a variety of ways. Sometimes landlords inherit a property that they then turn over to renting. Sometimes owners of properties become unintentional landlords because they are unable or unwilling to sell a property at the value the market currently dictates.