Company landlords cut portfolio expansion plans

Only 11% of limited company landlords plan to expand their portfolios over the next year, down from 38% in the spring, research reveals.

Kensington Mortgages’ BTL Barometer also found a sharp fall in the proportion describing access to buy to let mortgage finance as easy, from 74% to 42%.

Most intend to keep their portfolios the same size, with 77% planning to do so, compared with 53% previously.

Those surveyed own an average of 12 properties, and more than half have company portfolios in which no more than half the properties are financed by mortgages.

Landlord investment plans

Allison Buckley, the lender’s chief executive officer, said: “Landlord confidence remains resilient, but our latest BTL Barometer points to a market that is becoming more considered in its outlook.

“While the majority continue to expect rental yields, demand, and property prices to increase, expectations have moderated since the spring.”

She added: “Encouragingly, fewer landlords expect mortgage costs to rise and the proportion reporting higher running costs has also fallen, although access to finance and regulation remain important considerations.

“We are also seeing a clear shift towards consolidation rather than rapid expansion, with more than three-quarters intending to maintain the size of their portfolios over the next year.”

Buy to let outlook

Despite fewer landlords planning to expand, 80% remain confident about the market’s prospects over the next 12 months, down from 89% in April.

Tenant demand is now the most frequently cited factor influencing confidence, taking the place of interest rates in the previous survey.

Regulation remains a concern, with three-quarters expecting the regulatory environment to become more challenging over the coming year.

Almost all respondents said potential reforms, including proposals to replace council tax and stamp duty, would influence their future property investment plans to at least some extent.

Investment in existing properties

Spending on existing rental homes has continued, with 99% of those surveyed having made improvements over the past year.

Work ranged from replacing fixtures and fittings to improving energy efficiency and building extensions.

Cash savings were the most common source of funding, although some landlords remortgaged the property being improved, another property in their portfolio or their own home.

Energy efficiency requirements also feature in future investment plans, with 96% saying these influence their decisions.

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