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Buy to Let Landlords Display Strong Confidence in Property Market Prospects

A recent study from The Mortgage Lender (TML) reveals a robust sense of optimism among buy to let (BTL) residential landlords regarding the property market’s performance in the upcoming year. An impressive 74% of these landlords expressed confidence, with 27% feeling particularly assured about the market’s future.

This confidence is even more pronounced among certain groups. Landlords specializing in homes of multiple occupancy (HMOs) showed the highest confidence level at 86%, followed closely by those catering to student accommodations (84%) and portfolio landlords owning more than five properties (82%).

The study also indicated a strong belief among 71% of landlords in the promising performance of their individual property portfolios over the next 12 months. This sentiment was most common among portfolio landlords, 78% of whom expressed confidence. Interestingly, landlords with over five years of experience showed greater confidence (73%) compared to their less experienced counterparts (69%), likely due to their experience in navigating various economic cycles.

Tenant demand has also seen a notable increase, contributing to the positive outlook. Around 73% of landlords reported a rise in tenant interest in the past six months, with 27% observing a significant upsurge.

The growing demand has had a direct impact on rental prices. A majority (73%) of landlords have raised their rental fees in the past year, with an average increase of 34% among respondents. Reasons for this hike include keeping pace with their own escalating costs (52%) and aligning with rising rents in their local areas (28%).

Chris Kirby, Head of Key Accounts & Specialist Distribution at The Mortgage Lender, commented on these findings, highlighting the critical role of the BTL industry in sustaining the residential market. He acknowledged the challenges landlords face, such as higher operating costs and inflationary pressures, yet emphasized the necessity of maintaining a supply of high-quality rental properties. Kirby also advised landlords considering portfolio expansion or remortgaging to seek broker advice to capitalise on the best opportunities in the forthcoming year.