Landlords eye portfolio expansion

I bet they wont be buying in Scotland or Wales

Reply to the comment left by GlanACC at 13/06/2023 - 09:19
I also bet it's less likely they are planning to do so in Scotland and Wales which is a shame for Scotland and Wales because Scotland and Wales need investment (and not just in camper vans).

If I had to guess I would also guess that the landlords planning to invest are in the incorporated landlords formerly in the minority but increasing in number.

So 60% of one in ten landlords plan to buy in the next 2 years.

Is this not the same as just over half of only 10% of landlords plan to buy in the next 2 years?

So that's 9 out of 10 not looking to buy...and then only 60% of the buyers looking to buy in the next TWO years. Is this supposed to tell us things are good, or have I got something wrong here?... Because that looks like a pretty dead market to me. Do they bother asking how many are planning to do the opposite and sell up, because that's what I hear most landlords are planning to do quite soon.

Landlords might buy in the next two years only as there will be an opportunity to purchase cheaper properties and not because the PRS is a good sector.

This articles does not mention how many landlords plan to sell up in the next 2 years. According to these very pages in April “Shock poll finds 44% of landlords will sell up if interest rates rise to 4.5% next month” (they did). So if 6% of landlords (which is what the current article is really saying) intend to buy in the next two years and 44% plan to sell does that mean we are going to lose 38% of landlords? Probably not, but for sure we are going to lose many more rental properties than we are set to gain. In the last official Landlord survey 43% of Landlords owned just one rental property which represented 20% of all tenancies. A portfolio landlord can handle the odd bad tenant it’s probably factored into their business model but for those people relying on a single rental income as significant part of their income one bad tenant can spell ruin. I think these single owners will be the people who will sell. They don’t want the addition admin burdens that the Rental Reform Bill will bring. They see it becoming more difficult to get their property back, they worry about EPC regulations, rumours of rent controls etc. For these people rising interest rates will bring similar returns to net rental income (especially if they are at the lower end of the market) if they sell and invest the money for a hassle free life. So rising interest rates will force some out of business but will tempt others to leave the business.

Reply to the comment left by northern landlord at 13/06/2023 - 18:11
It's not just the effect of not being able to offset the costs of one bad tenant against the others (thereby making the virtuous pay for the misdeeds of the sinners). A large number of those landlords with a small portfolio aren't incorporated and they cannot deduct their finance costs, where as of course an incorporated business can deduct all its costs.

BTL only really works as a geared investment. With high interest rates and limited tax relief for interest payments there is no incentive for landlords to invest.

Might as well leave the money on deposit at, say, 3.5%pa, rather than risk losing it on heavily regulated properties, where you have all the hassle and headaches, and could have a non-paying tenant, or tenant that trashes the place, or both.

The closer landlords get to retirement, the more likely it is that they will ditch BTLs and turn to alternative investments. They could even become secured bridging lenders for a similar, or better return, and less hassle and risk.

Reply to the comment left by Churchills Tax Advisers at 13/06/2023 - 22:41Couldn't agree more. I am now past retirement age and have sold 12 properties (6 to go, but may pass them on to my kids as I operate as a LTD company). I see Natwest are now using an interest rate of 8% when assessing new BTL mortgages. I can'r see anyone making any kind of decent profit if they have to remortgage. Happily I have paid mine off and I had a 10 year fix (can you still get those). In 25+ years of BTL I have had my fair share of scumbags but as I then had a decent sized portfolio I could absorb non payers. The 6 I have left are all long term tenants (5+ years at least and I wont turf them out to sell). If you only have 1 or 2 properties you are in a difficult position now, especially if 1 tenant decides not to pay.

So 90% are not looking to increase their portfolio. ..

And 60% OF THOSE ....

Which actually means that only 6% are looking to increase their portfolio in the next two years

So in a survey of 2000 landlords only 120 are looking to increase their portfolio in the next two years of which 24 are looking to buy 'further afield' - which means what? Out of the UK? Away from their current portfolio?

This is just crap reporting without putting things into true context,