Landlords have high hopes for BTL in 2013, says CHL survey

Nearly 71% of landlords are upbeat about the sector’s prospects in the coming months, with just 4% harbouring a negative outlook. This is broadly similar to the percentage of optimists in the previous two iterations of the survey (May 2012 and November 2011) which stood at 71% and 72% respectively.

A third of landlords said they intend to expand their portfolios in 2013, but 56% are content to sit tight and not buy or sell any properties in the coming 12 months. Less than 3% intend to reduce the size of their portfolios. The 33% who are planning on expanding their portfolios represents a 2% increase from when the same question was posed in May 2012.

Looking back at 2012, nearly three-quarters (71%) of landlords didn’t buy or sell any investment properties, while 18% expanded their portfolios.

Property investors continue to view bricks and mortar as the investment class with the best outlook for the next three to five years, with 62% selecting it as the safest bet compared to stocks and shares (19%) and cash (7%).

Bob Young, Managing Director of CHL Mortgages, commented:

“The latest instalment of our Landlord Survey shows that despite the continued economic uncertainty, property investors are still confident when it comes to the buy-to-let market. This optimism not only outflanks the positivity shown by other types of borrowers such as first-time buyers and remortgagors, but also dwarfs the positivity displayed by other types of investors. While economists seem divided on whether 2013 is going to be a good year, property investors already seem sure it will be.

“With nearly three-quarters of respondents upbeat about the buy-to-let sector’s prospects and a third planning to expand their portfolios, this is good news not just for brokers and lenders who operate in the buy-to-let market, but also for tenants who are struggling to find a suitable rental property as demand continues to outstrip supply. Given that less than a fifth of landlords expanded their portfolios in 2012, this suggests that the supply shortfall could start to be addressed as we head into 2013.

“More than a third of respondents reported yields in excess of 7% and this, coupled with low arrears and high demand, has created a more positive attitude amongst property investors. The problems besieging the wider economy are highly unlikely to dissipate in 2013, but for the time being many buy-to-let landlords appear to be a far stronger place than might have been anticipated a couple of years ago. Confidence often breeds success and, where the private rental market is concerned, buoyant sentiment is keeping the market very much afloat.”

The December 2012 instalment of the Landlord Survey was completed by more than 640 CHL landlord borrowers.