Demand for buy-to-let shows no signs of weakening as almost two thirds of brokers expect to do more mortgage business with landlords this year, according to a new Nationwide Building Society survey.
While the economy has entered into a double-dip recession, the signs are that the buy-to-let market is in a buoyant mood. Almost three quarters of brokers surveyed believe the number of new landlords will increase this year, while the number of professional landlords looking to expand their portfolio is also expected to rise in 2012.
The Mortgage Works asked brokers about their experiences in 2011 and their expectations for the buy-to-let market in 2012. The survey focused on first-time landlords, professional landlords, buy-to-let products and the market as a whole.
Market overview
64 per cent of brokers expect to do more buy-to-let business in 2012
69 per cent of brokers said they did 24 or more buy-to-let applications in 2011, up from 31 per cent of brokers who made 16 or more buy-to-let applications in 2010
Ian Andrew, managing director of group intermediary sales at Nationwide and The Mortgage Works, said: “While the volume of buy-to-let lending is nowhere near the volumes seen before the credit crisis began in 2007, last year’s buy-to-let lending reached more than £14 billion. This is an increase of 40 per cent from the previous year and we expect it to rise again in 2012. It suggests buy-to-let is climbing its way back up, which is welcome news for landlords and brokers.”
First-time landlords
71 per cent of brokers predict the number of new landlords will increase in 2012, compared to 51 per cent a year earlier
48 per cent of first-time landlords expect to buy their second property within two years, up from 26 per cent a year earlier
Andrew said: “The outlook for first time landlords in 2012 remains positive, with two thirds of brokers seeing a rise in first-time landlord business in the past six months. In addition, virtually all first time landlords are looking to buy another property in the next couple of years.”
Professional landlords
58 per cent of brokers believe professional landlords will buy more properties in 2012, up from 48 per cent a year earlier
34 per cent of landlords are investing in buy to let for long-term capital growth, while 43 per cent are investing for their retirement
Andrew added: “The positive outlook of professional landlords is reflected in our findings that the vast majority of brokers predict they will buy more properties in 2012, indicating continuing demand in the sector. We can all be encouraged by this optimism, especially given that one in seven clients already have at least four properties in their portfolio.”
