Overall optimism among buy to let landlords is at the lowest level recorded in the past 12 months claims a quarterly survey into the sector.
But despite this dip in business expectations, more than half (52 percent) of the landlords interviewed by independent buy to let mortgage broker The Money Centre still believe their prospects are good or very good, and one in five are currently looking to buy more property, which is a higher proportion of landlords than those planning to sell.
This positive note is reflected in early signs of a recovery in the perceptions of property as having good potential for investment growth. Over half (54 percent) of landlords believe property offers a strong or reasonable potential for growth when compared to other forms of investment.
Back in December 2007, 10 percent fewer landlords were positive about the potential of property.
Lynsey Sweales, director of The Money Centre, said: “Buying property is always best viewed as a medium to long term investment option and that’s how most buy to let landlords see it. The research shows the average length of time landlords expect to be in letting is 17.5 years, which is why scaremongering over house prices dropping is not a major concern for professional landlords.”
Rental yield expectations are also picking up since the end of last year. There is a slight increase in the number of landlords who state their expectations are very good, and the number of landlords who felt expectations are very good or good has remained static at 61 percent since December.
Sweales added: “We think there is good opportunity for most landlords to achieve increased rental yield in the coming months. A lot of people seem to be postponing buying property until the market situation becomes clearer regarding prices which means more people are looking to rent.
“Over half (56 percent) of those we spoke to hadn’t increased rents in the past 12 months, but those who had, had done by an average of 6.6 percent.”
Buy to let landlords are looking to new regions and cities in which to invest. Central London remains a popular investment area with one in three (34 percent) landlords looking to buy in the heart of the capital city. However, the North West and non-central London areas look set to be future hot spots with more landlords considering buying properties in these areas.
The research revealed the top five cities where landlords have properties are:
1. London
2. Glasgow
3. Manchester
4. Birmingham
5. Cambridge.
London, Glasgow, Birmingham and Manchester have featured in the top five locations throughout the last 12 months, but this is the first time Cambridge has entered the top five pushing Leeds out of the top of the table.
* Potential and existing landlords are being invited to an exhibition hosted by The Money Centre, on purchasing discounted property.
The Expo which is taking place on Thursday 5 June 2008 onboard the HMS President, Victoria Embankment, London, EC4Y 0HJ is being held to help professional property investors to acquire discounted properties. Doors open at 11am and close at 9pm.
