Confidence is key to a thriving buy-to-let market

It sounds strange but this trip also gave me some confidence that the wheels of the world were still turning outside of my bubble. Of course, I already knew this from speaking with colleagues, intermediaries and landlords across the UK but to see it with my own eyes reaffirmed that life is going on, just in a slightly different manner to what we were used to.

This was also a good time to reflect on what we have gone through and how to proceed going forward, from both a personal and work perspective. Whilst trying to get away from work as best I could, I did get sucked into reading the latest Q2 Landlord Panel research from BVA BDRC which wasn’t a bad thing as it was laden with confidence and optimism.

Focusing on some of the main headline points from this:

Landlords are now reported to be more upbeat when it came to business expectations for the next three months. All five optimism indicators saw an uplift in the proportion of landlords with a positive outlook - rental yields (+18%), their own lettings business (+18%), the UK private rental sector (+13%), capital gains (+7%) and even the outlook for the UK financial market (+4%).

The proportion of landlords feeling confident about the near-term prospects for their own lettings business is now said to be at its highest point in over a year (37%).

There was little difference in landlord confidence by portfolio size or buy-to-let leveraging, although there were some regional variations.

Focusing on this regional outlook, the research outlined significant variability in regional business expectations, with those operating in the North West and Yorks & Humber typically more upbeat.

The South East and North West remain the regions which are most likely to see purchase activity in the next year. Most landlords are looking to sell in the West Midlands, with anticipated sales activity in this region twice as high as anywhere else in the country, at 28%.

Looking further ahead, more landlords are now looking to expand their portfolio in the next year. The proportion of landlords intending to buy in the next 12 months increased by 5% in Q2 to 17%, the highest level for around 4 years. In addition, those looking to reduce the number of properties they own has fallen to a three year low of 17%. It’s also important to note that these responses were gathered prior to the Summer Announcement in July.

We all need some kind of break once in a while, and amidst current conditions its arguably more important than ever. We also need to occasionally step out of our bubble to appreciate what’s happening around us and appreciate how others are coping with the situation. The buy-to-let market has coped admirably with whatever has been thrown at it. It’s certainly proved to be testing time for lenders but we have never been given any reason to lose faith in the solid fundamentals which remain firmly intact.

Confidence is key to any successful sector, and it’s great to see heightened levels of confidence, optimism and opportunity coursing through the buy-to-let marketplace.