Buy-to-let investors planning expansion to portfolios

Tenant demand is fuelling buy-tolet investors’ plans to expand their portfolios.

The latest landlord survey from Landbay suggests 41% will add to their investments in the next 12 months.

According to the research, 35% of the 1,100 respondents said an increase in the number of tenants was the main driver for their expansion plans. This is up from 30% in the last Q4 survey. A third of those surveyed said a potential drop in house prices would persuade them to increase their portfolio.

The strongest intention came from landlords with between 11 and 20 properties, with more than half (54%) planning to expand their portfolio. While 40% landlords with more than 20 properties shared the same sentiment, so did almost the same number of those with two or three properties in their portfolio (44%).

Landbay also surveyed the same landlords on whether or not they planned to sell any of their properties in the next year. Two thirds (64%) said they were not.

Three quarters of those with individual properties said they would not sell, 69% of those with two or three said they would not and 65% of those with a portfolio of more than 20 said they would not. Although the number of landlords planning to shed some properties increased slightly to 30%, from 28% in the previous Q4 2022 survey, only 6% plan to get rid of all their properties.

Unsurprisingly, the deciding factor for 60% of landlords intending to sell is rising interest rates – an increase from 45% in the previous survey, while almost half (45%) said rent doesn’t cover their mortgage costs – up from 28% in the Q4 2022 survey. Respondents also mentioned landlord taxation (47%), the cost of meeting the proposed EPC requirements (40%) and worries about evicting tenants (34%).

Sheldon Bosley Knight’s associate director Nik Kyriacou said: “This is encouraging news. There is so much negativity around the private rental sector at the moment with the publication of the Renters’ Reform Bill and the on-going uncertainty over proposed legislative changes.

“However, this shows many landlords are looking at the long-term picture and displays a confidence they will be able to navigate their way through.

“We should encourage those landlords who are choosing to stay in the sector and continue to provide a vital service – that of providing housing to those who need it.

“As ever if you need any advice or support, we can help especially when it comes to choosing the right investment opportunities.”