The buy-to-let market has remained remarkably resilient, despite change sin tax regulations, the lettings fees ban and interest rate rises, and the majority of landlords feel positive about the year ahead. This statement is also backed up by the annual Shawbrook Bank buy-to-let barometer, where 65% of investors reported they feel confident about their property portfolio in 2018.
Many landlords have therefore decided to streamline their portfolios in order to strengthen return in the changing buy-to-let landscape. Data from Paragon Mortgages supports this, stating that smaller scale landlords and prolific portfolio landlords in particular have been reorganising, with many using downsizing as a method to manage economic changes.
The research also highlighted a drop in the number of small scale landlords, with the total of those who own between three and five buy-to-let properties falling at the end of last year. A reduction in large scale landlords who own in excess of 50 properties was also seen. The only group increasing their portfolios were middling landlords with between six and 20 properties in their portfolio, a group that increased by 4% in the last 12 months.
The current market factors have now created the perfect environment to sell, with an influx of first time investors entering the sector. Statistics from the latest HomeLet Rental Index show that rents are on the rise with prices up 2% year-on-year during May, which, combined with the demand for rented homes believing to hit six million by 2025, means that the buy-to-let sector will continue to entice investors.
Moreover, a shortfall of quality rental accommodation and growing national demand makes for a win-win situation when it comes to selling. Vendors have an eager audience of investors waiting to buy for the right price, while buyers can be confident that they are buying into a buoyant and growing market.