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BTL Landlords Confidence Returning

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While confidence remains low among landlords after recent government interventions in the buy-to-let (BTL) market, buyers are slowly returning, according to research from Paragon Mortgages.

Following an increase in the rate of stamp duty payable on BTL purchases, and with a staged reduction in income tax relief available on rental income due to start next year, landlord confidence remained low during the first quarter of 2016.

A survey of more than 1,000 private rental sector landlords undertaken by BDRC Continental revealed 41 per cent rated their prospects as being either ‘good’ or ‘very good’, down from 65 per cent during the same period last year.

Indicating that falling levels of confidence may have stabilised, the figure is just a 2 per cent fall on the fourth quarter of 2015.

The first quarter of this year also saw landlords’ property purchase intentions edge above selling intentions, reversing the situation seen in the fourth quarter, when more landlords were looking to sell property than were looking to buy.

Nearly a fifth indicated that they intended to purchase a property in the coming year, up from 17 per cent in Q4 2015, while 16 per cent stated they intended to sell a property, down from 19 per cent in the previous quarter.

Driving this trend, Q1 2016 saw an increase in tenant demand, with 39 per cent of landlords reporting demand as increasing either slightly or significantly, up from 34 per cent in Q4 2015.

Despite negativity persisting around business expectations over the short term, rental property as an asset class is still viewed favourably by landlords, with 38 per cent of landlords polled believing the private rented sector to be ‘much better’ than other investment options.

“The main driver of this recovery remains, as ever, tenant demand, which has risen in Q1 2016, along with yields. Landlords are clearly taking the view that BTL remains an attractive long-term, demand-driven investment, which continues to outperform other asset classes.”


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