Most residential landlords are still positive about the prospects of the country’s buy-to-let sector, but according to a survey conducted by CHL Mortgages, uncertainty has risen noticeably, compared to figures published six months ago. In fact, 81% of landlords believed that the sector was headed in the right direction in late January, but the newest CHL study found that this figure slipped to 64%.
Additionally, one in four landlords indicated that they were uncertain about the sector’s prospects in the near future, representing a significant increase from the much lower 9% figure published at the beginning of the year. This drop in confidence may have a significant impact on residential property sales, as the number of landlords looking to add to their portfolio has dropped to 28%. This represents a 10% decrease from the last survey. As such, the supply of rental properties may continue to lag behind the strong demand that currently characterizes the buy-to-let sector.
There is a clear reason as to why more landlords no longer plan to purchase new properties. Many have expressed frustration over the fact that buy-to-let lending has not yet recovered. Bob Young, CHL’s managing director, noted that many landlords would prefer more flexible deposit regulations, thus decreasing the amount necessary to obtain a mortgage.
While fewer landlords are looking to purchase new properties, a clear majority intends to keep its current real estate and does not plan to sell. While 53% of landlords said that they would not sell back in January, this figure now stands at 66%.
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