A Shawbrook survey has found that despite the uncertainty of Brexit and increasing tax burdens for landlords, buy-to-let investors remain largely optimistic about the prospects for the market in the year ahead.
In its annual Buy-to-let Barometer, which explores the current and future sentiment of professional landlords, Shawbrook found that 65% of buy-to-let investors are confident about the performance of their property portfolio in 2018. Just 14% say they are concerned.
The specialist leader said good tenant demand and high yields appear to be driving feelings of optimism amongst this cohort of property investors, with 21% experiencing an increase in tenant demand in the 12 months to 2018.
Shawbrook said that although landlords are optimistic, they are also realistic, understanding they will be facing challenges both in the near and longer term. With UK showing lacklustre growth and the overhanging threat from Brexit, confidence in the economy is down, falling from 47% in 2017 to 34% in 2016, while levels of concern have risen from 33% in 2016 to 42% in 2017.
Despite weaker growth prospects for the UK economy, investor appetite remains healthy. 39% of landlords plan to invest in another buy-to-let property in 2018, with the North West and South East singled out as the preferred regions.
Karen Bennett (pictured), managing director of Shawbrook Bank, commercial mortgages, said: “There’s a healthy dose of uncertainty around at the moment, but the buy-to-let market is showing its resilience. Property continues to offer an excellent underlying investment vehicle for professional landlords with the right investment strategy. While the investment case for buy-to-let remains strong, there are particular challenges ahead for portfolio landlords and the additional impact of the PRA changes.
“Landlords now face much more stringent affordability tests and it’s therefore more important than ever that landlords are clued up on their obligations as the market continues to get even more complex.”