Landlords are keen on expanding their property portfolios by the end of the year, the latest property investor survey from Mortgages for Business reveals.
Two-thirds (65 per cent) of landlords the specialist buy-to-let mortgage broker has spoken to in April 2015 said they are planning to buy a new property in the next six months. This shows a rapid growth as that proportion was only 55 per cent last November.
Just 8 per cent of landlords currently plan to sell any property, while over a quarter (27 per cent) do not intend to either grow or reduce the size of their property portfolio over the next six months.
Landlords’ preference of ways to finance their buy-to-let mortgages has slightly moved towards variable rate products and longer-term fixed-rate mortgages, according to the survey findings.
More than a quarter (26 per cent) now prefer variable rate deals, compared to 23 per cent in November.
Two- and five-year fixed rate mortgages are slightly less popular now than they were at the end of last year. Currently 22 per cent of landlords prefer a two-year fix (23 per cent in November) and around a third of landlords (30 per cent) would fix their mortgage repayments for five years (31 per cent in November).
Ten-year fixed products on the other hand have gained popularity with one in ten (10 per cent) of landlords now saying they would choose such product, compared to 8 per cent in November.
David Whittaker, managing director at Mortgages for Business, commented:
“Landlords are better capitalised and now more confident about reinvesting. A strong rental market is being driven by tenants moving to make the most of job opportunities, and now gradually starting to earn more too. That new surge of demand is putting more upwards pressure on rents, and landlords are only just beginning to supply more homes to let in response.
“On top of this, after the surprise stability of a majority government, landlords will almost certainly see a short-term boost of house price growth – while the threat of damaging regulation has been lifted for at least the next five years.”
Commenting on mortgage product choices, Whittaker said:
“Over the medium term, interest rate expectations have never been friendlier to landlords. This is clearly reflected in the proportion willing to eschew guaranteed stability in favour of some immediate savings. Over a two year period this may be rational, and landlords as a whole don’t tend to take extraordinary risks with their financial position.
“However, over the longer-term, the stability of a fixed rate is likely to pay off, and given how five year fixes are barely more expensive than some variable rates we maintain our existing advice to fix now if it fits with a landlords’ investment plans over the next five to ten years.”
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