45% of landlords say they are optimistic about the buy-to-let market in 2021, according to a new survey from buy-to-let mortgage broker Property Master.
This compares to 29% who are pessimistic about the buy-to-let market in the coming year; many of these fear landlords would be, in the words of one respondent, “sitting ducks” when it came to raising taxes to pay for the current crisis.
Just 10% of the landlords surveyed by Property Master planned to exit the buy-to-let market in 2021 and almost 70% said they were not about to sell any of their properties in the new year.
Angus Stewart, Property Master’s chief executive, said: “For landlords, as for many other sectors, 2020 is a year that brought plenty of challenges. But in the case of landlords, Coronavirus and the resulting economic uncertainty came on the back of a raft of regulatory and tax changes over recent years that have left the sector battered and which saw smaller landlords in their thousands throw in the towel.
“However, our survey shows the buy-to-let sector as a whole is a resilient one. Those landlords that have survived may well be stronger and our survey shows them as giving buy-to-let the thumbs up as we move into 2021. We see the year as being one of two halves. There is clearly continued turbulence forecast for the first half of the year as Coronavirus and Brexit play out. But the fundamentals of the private rented sector remain and now more than ever an increased number of people need a good quality roof over their heads, and this will create plenty of opportunity for landlords to do well.”
The number of landlords surveyed by Property Master who planned to add to their portfolio in the new year was evenly split with those who had decided in 2021 to stick with their existing property portfolio. Almost 43% of landlords said they planned to buy more property in 2021 and the same number planned to stick with the properties they already had. Almost 13% were undecided.
In terms of buy-to-let mortgage rates landlords seemed more relaxed about the outlook although many commentators have recorded an increase in rates in recent months. Almost 54% of landlords surveyed thought that buy-to-let mortgage rates would stay the same as opposed to almost 38% who thought they would increase further. Just under 9% thought rates would decrease despite the rumours about a possible negative Bank of England base rate.
Stewart added: “A competitive and innovative buy-to-let mortgage market has proved to be a big plus for the private rented sector. Inevitably, the Coronavirus has led to some caution amongst lenders especially around loan to value ratios, but we see this as easing as the year plays out. We are confident the mortgage market will continue to support the aspirations of British landlords to expand and build upon their property portfolios.”