Nearly nine in 10 (88 per cent) of portfolio landlords - those with over five buy-to-let properties - have added to their portfolios in the last six months despite market uncertainty.
According to research from Shawbrook, which surveyed 1,000 residential landlords in the UK, around 25 per cent intend to invest in an additional property within the next year, with 22 per cent looking to purchase multiple properties.
Emma Cox, managing director of real estate at Shawbrook, said: “Whilst the property market remains challenging, it’s encouraging to see professional landlords continuing to invest and seek opportunities to diversify.
“Our research has shown that a significant number of landlords have taken proactive steps to expand their portfolios, while responding to demand to add quality, energy efficient rental stock to the market for renters.”
The findings were compared to smaller landlords - those with between one and four rental properties - who have been “less bullish”, with just 58 having added to their portfolio in the last six months.
Diversifying
Shawbrook's research also looked at how landlord's intended to diversify their portfolios.
As part of this it was reported that 39 per cent of those looking to add at least one property to their portfolio were looking to diversify by location, while 37 per cent were actively exploring different types of residential properties.
In addition, 26 per cent of portfolio landlords said they are turning their attention towards student housing and 21 per cent were looking at the retirement housing market.
Among those who said they were diversifying their property portfolios, 33 per cent said they had done so to respond to tenant demand, while 28 per cent said they had done so to priorities more energy efficient buildings.
In addition, of the 88 per cent who are planning to add at least one property to their portfolio, 36 per cent wanted to capitalise on good deals currently in the market.
Context
The research comes amid ongoing concerns of high-demand and low-supply in the UK’s rental market.
This is because demand for rental homes was 51 per cent above the five-year average, and the number of available homes 30 per cent below average in September 2023.
Shawbrook stated that fears have “yet again surfaced” of landlords selling rental property due to rising mortgage costs, adding further concern to challenges already seen in the market.
However, the research highlighted a cohort of savvy professional landlords continuing to invest and add quality rental stock to the market.
Looking to the future
Cox added: “Looking ahead, it will be important for buy-to-let landlords to explore external financing options and lean on specialist lenders.
“To continue meeting buyer needs in a sustainable way, astute landlords will need to keep thinking one step ahead, adapting their strategies to adjust the rapidly changing real estate landscape.”
tom.dunstan@ft.com
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