Landlords Have High Hopes for Buy to Let in 2012Make Text Bigger
One in five landlords added property to their rental portfolios last year as confidence over interest rates and tenant demand remains buoyant.
Buy to let investors in London have the highest hopes for 2012, with 85% expecting rents to keep rising by an average 2.4% and 100% predicting house prices in the capital will go up an average 4.7%.
Landlords outside the capital are less hopeful – only 30% expecting property values to stay the same or increase during 2012.
Around 80% expect rents in the regions to rise by an average 1.2%.
Six out of 10 landlords nationwide expect interest rates to stay at 0.5% during the year, while some say the rate may go up to 0.75%.
The buy to let market research for the last three months of 2011 from property specialists Young Group also looked at plans landlords had for their property.
More than a third (37%) intend to hold their property until 2031, while the average future hold period was 15.4 years. Neil Young, the firm’s chief executive, said: “The appetite from private investors for additional investments is strong. The London rental market is particularly strong and demand from tenants seeking quality accommodation shows no sign of abating, buoyed by a population that is spending longer than ever living in rented homes and increasingly living in solo households.”
The research also showed that 42% of landlords are looking to expand their portfolios in the capital over the next 12 months, while another 16% are looking at investments outside London.
Many expect their expansion plans to be hindered by a lack of mortgage finance – 20% refinanced in 2011 and 42% are concerned about availability of finance from specialist lenders.
“It remains a good time to continue holding assets in the PRS with expected growth in income, occupancy levels remaining very high and a shortage of new stock coming to the market,” Young wrote in his blog.
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