Increased access to buy-to-let mortgages, spikes in rental demand and favorable pricing and interest rates are stoking optimism among landlords across the UK. The National Landlords Association’s Landlord Optimism Index shows that 65% of landlords surveyed feel very positive about the outlook in the rental market as regarding their profits. Despite the favorable outlook, industry observers advise prospective landlords to seek expert advice before making rental purchases or investing in the market. For more on this continue reading the following article from Property Wire.
Private property landlord optimism in the UK is at its highest point for almost four years, according to the latest Landlord Optimism Index from the National Landlords Association.
Some 65% of landlords surveyed rated prospects for their own lettings business over the next three months as very good or good.
Landlords are also increasingly optimistic about the overall state of the private rented sector (PRS), with 54% rating the industry’s prospects as good or very good, an increase of 8% compared with the NLA’s findings during the second quarter of 2010.
However, landlords remain less certain about the state of the UK financial market with only 6% rating this positively, a decrease of 3% compared with the same time last year.
‘After a challenging few years, it is encouraging to hear that the majority of landlords are feeling positive about their lettings business and the overall state of the private rented sector,’ said David Salusbury, NLA chairman.
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‘The increasing availability of buy to let mortgages and strong demand for rental accommodation is further stimulating positive sentiments, with rent arrears appearing to stabilise and void periods decreasing in recent months,’ he explained.
‘The private rented sector is demonstrating its resilience, in marked contrast to some other industries and investments, he added, but also pointed out that like other business people, it is clear that landlords are not immune from the effects of financial uncertainty.
‘The fragile state of the economy is a concern for landlords, many of whom have mortgages to pay or rely on their property portfolios to earn a living. The cuts to local housing allowance are a further worry for tenants and landlords alike. Both should be mindful of how they may be affected and give consideration to how they will deal with the long term consequences of welfare reform,’ he said.
National lettings specialists Belvoir, who have more than 140 offices across the UK, said that the survey accurately reflects the trends they are seeing from their own landlords, but urges investors to seek expert specialist advice before committing to the purchase of a rental property.
‘We have seen rents increasing by 3 to 5 % a year, a healthy level of increase which is in line with inflation. The outlook is very good and there is a sense of positivity and optimism across the industry,’ said Dorian Gonsalves, managing director of Belvoir Lettings.
‘However, I would urge landlords to think carefully before investing with investment clubs and below market value operators, who are once again becoming very active in buy to let by appealing to landlords who think they can make a quick profit because they read headlines such as buy to let booming. Investment landlords need to be sensible and realistic and beware of promises that simply cannot be achieved,’ he added.
Haart Financial Services has also reported that demand for buy to let mortgages has risen to 16.8%, their highest level this year. Buy to let now accounts for almost one in five of all mortgages processed by Haart compared to the start of 2011 when they accounted for just 10.9% of all mortgages.
‘The substantial increase in demand for buy to let mortgages is the clearest indicator yet that the appetite for buy to let among house buyers is returning after a couple of years of fairly benign growth. This is reflected in the demand among our customer base for lettings at Haart, which continues to grow exponentially year on year at present,’ said David Miles, managing director of Haart Financial Services.
This article was republished with permission from Property Wire.