Buy-to-let landlords are expecting to see a significant increase in house prices over the next 12 months, the latest survey from Mortgage Trust reveals.
Of the 90% of respondents who expect house prices to rise over the coming year, just over half (53%) expect an increase between 3% and 5%, while just over one tenth expect 6% or more. This market confidence is encouraging further property investment, with 25% of those surveyed indicating they are actively purchasing additional rental property.
Over the next 12 months, landlords expect to increase their portfolios by an average of 16%, an expansion of just over one property per landlord.
Nicola Severn, marketing manager at Mortgage Trust, said: “Although many pundits were predicting stagnant house prices at the beginning of the year, it is clear that the demand and supply ratio in the housing market is continuing to push up prices.
“Buy-to-let investors are acutely conscious of the current economic conditions, and it is no surprise that they are increasing their portfolios in order to take advantage of potential price increases.”
Mortgage Trust found that just under half (49%) of landlords have rental returns of 6% or more of their portfolio value, and a further quarter of respondents are currently increasing their rents. The Houses in Multiple Occupancy (HMOs) government regulation has had little effect on landlords, Mortgage Trust said. The majority of respondents are confident that their properties do not require a licence. However, 17% of the sample admitted they were unsure about the legislation and did not know if they would fall under the regulation. One fifth of landlords who have already obtained HMO licences felt the process was timely and confusing.