There has been a slight fall in the proportion of brokers who think this is a good time for landlords to expand their portfolios than six months ago, according to research published by West One Loans.
In February 2012, when West One Loans last surveyed brokers on their confidence in the buy-to-let market, 83% said they thought it was a good time for investors to expand their buy-to-let portfolios. In August, that number fell to 81%. Meanwhile, the number of brokers who are unsure of the market has doubled, from 5% in February, to 10% in August.
“While there has been a fall in the number of brokers who are certain investors should expand their portfolios, the change is small – and 81% of brokers are still confident it’s a good time to invest in the sector,” said Duncan Kreeger, chairman of West One Loans.
“Furthermore, the number of brokers who think it’s definitely not a good time to pile into the market has fallen to less than one in 10. Landlords and brokers have different opinions of the market. While fewer brokers think it is a good time to invest in buy-to-let, high demand from landlords suggests they feel otherwise.”
In February 2012, 73% of brokers offering buy-to-let bridging products said they were doing more business than they were six months before. This has now risen to 98%.
“Despite a slight cooling of broker sentiment towards buy-to-let as an investment for future, thanks to the current demand from landlords, buy-to-let bridging is flourishing,” explained Kreeger. “Back in February, 70% of brokers offering buy-let products said they were writing more buy-to-let business than they were six months before. That number’s now risen significantly. Bridging is still not being affected by increasingly problematic conditions in the wider residential market. In fact, it’s thriving off the back of them.”
61% of brokers said growth is ‘Moderate’ or ‘Fast’ compared to 40.2% in February.
38% of brokers’ bridging customers are now landlords, compared 37% six months ago. West One Loans said the increase has been driven by demand from professional, rather than amateur landlords, with professional landlords now representing 25.4% of brokers’ bridging customers, compared to 23.3% in February.
Kreeger added: “I am pleased to say that the growth in buy-to-let business seems to be steady, rather than explosive at the moment. We aren’t seeing a massive increase in the number of brokers saying buy-to-let is booming – this is a moderate, sustained rate of growth. The long-term macro-economic picture appears to back that up.
“Given the current housing shortage, buy-to-let should represent a sound investment for the future. But professional landlords are finding it difficult to get access to finance from high street lenders. Even when they can – it’s painfully slow. Over the last six months, they have woken up to the fact that bridging loans provide a rapid solution to their problem. And as property investors embrace bridging, brokers are seeing the benefits.”