0:03 AM, 21st November 2023, About 3 months ago
Despite inflationary pressures and rising interest rates, the UK’s portfolio landlords – those with five or more rental properties – are not deterred from growing their property holdings, research reveals.
Shawbrook Bank surveyed more than 1,000 residential landlords and found that 88% of portfolio landlords had grown their portfolios in the past six months.
Of those, 25% said they are planning to buy another property within the next year, and 22% are looking to acquire multiple properties.
The specialist lender contrasts the response with smaller landlords – those with between one and four rental properties – who are being more cautious, with only 58% having increased their portfolio in the past six months.
Shawbrook’s managing director of real estate, Emma Cox, said: “Whilst the property market remains challenging, it’s encouraging to see professional landlords continuing to invest and seek opportunities to diversify.
“Our research has shown that a significant number of landlords have taken proactive steps to expand their portfolios, while responding to demand to add quality, energy efficient rental stock to the market for renters.”
She added: “Astute landlords will need to keep thinking one step ahead, adapting their strategies to adjust to the rapidly changing real estate landscape.”
The research also reveals that portfolio landlords are diversifying and innovating their property portfolios, by exploring different locations, types of property and market segments.
Shawbrook says that 39% of those looking to buy at least one more property were seeking to diversify by location, while 37% were interested in different types of residential property.
Also, 26% of portfolio landlords said they were focusing on student housing and 21% were eyeing the retirement housing market.
The research comes amid ongoing concerns of high demand and low supply in the rental market, with demand for rental homes 51% above the five-year average, and the number of available homes 30% below average in September 2023.
There have also been fears of landlords selling rental property due to rising mortgage costs, adding further pressure to the existing challenges in the market.
However, Shawbrook’s research highlights a group of savvy professional landlords who are continuing to invest and add quality rental stock to the market.
Among those who said they were diversifying their property portfolios, nearly a third (33%) said they had done so to respond to tenant demand, while 28% said they had done so to prioritise more energy efficient buildings.
And of the 88% who said they were planning to buy at least one more property, more than a third (36%) wanted to capitalise on good deals currently in the market, with 35% already having capital ready to invest.
Previous ArticleLondon leads the way in rental affordability improvement
Next ArticleLandlords optimistic about rental yields and the PRS