Buy-to-let landlords are committed to the sector and their portfolio, according to new research from Precise Mortgages.
35% said that becoming a landlord was part of a long term investment decision and 27% of respondents said they were planning to keep their portfolio beyond retirement, with 18% holding on to it until retirement. There is also a high level of commitment to the portfolio and developing it over several years. Many aiming to increase the number of properties held by one to two per year (18%) and a small group aim to increase the number by more than five per year (7%).
Meanwhile, 58% said they’d found themselves in the position of being a landlord due to circumstances.
The research – Mortgage Voice – identifies several social factors which have contributed to the rapid growth in the number of ‘opportunity landlords’. Three in ten (28%) people inherited a property and chose to let it out, a fifth (21%) moved in with a partner who already owned a home, while one in seven (14%) let out a property they were unable to sell.
While homeowning remains an ambition for many people (62% of those who aspire to own a home want to buy within the next five years rising to 57% of those under 25) a proportion see renting as a viable alternative. One in five (18%) people feel that they can budget better as a renter, one in ten (13%) feel they can live in a better area as a renter and one in ten (10%) can rent a larger property than they believe they would be able to buy.
Research respondents identified improving the rates available and providing greater flexibility in product design as the most important factors that could improve the buy to let mortgage market.
Alan Cleary, managing director of Precise Mortgages, said: “As a nation we are renting for longer and until much later in life, a demographic and social shift that breaks away from past realities. This is for a variety of reasons, not least that we tend to marry later or migrate across country for jobs and family life. This change calls in to question the availability and quality of rental stock and shines a spotlight on landlords.
“The research demonstrates that contrary to popular belief – that buy-to-let landlords are mere ‘speculators’ – many landlords are in it for the long term. In order to respond to the changes – to support buy to let landlords and bring quality rental stock to market – the mortgage industry must work to develop a truly modern suite of products. Only then can we meet the need of emerging landlords.
“This is something that Precise Mortgages has long championed and our robust underwriting allows us to say yes where others have said no, meeting the needs of property investors to ensure their portfolios and businesses can continue to grow. This is important not only to the individual but to the national economy.”
