Confidence in the UK buy to let market is growing

1st April 2021

By Anna Bibby

New data has revealed that property investors have a growing confidence in UK buy to let after a turbulent time over the last 12 months. According to the buy to let lender Keystone Property Finance, there has been an increase in clients looking to apply for a buy-to-let mortgage - particularly those products offering larger loans. According to their data, Keystone found that the number of clients applying for larger loans has increased by 58% since December 2020, demonstrating a growing interest in UK property investment.

This new-found interest could largely be attributed to the stamp duty incentives introduced by the government that have now been extended until the end of September. The benefits of the stamp duty holiday for homebuyers have been widely publicised, but less so, are the benefits it has provided for investors. Ordinarily, landlords have to pay a minimum of 3 per cent if their property costs £125,000 or more. However, with the stamp duty holiday, the bracket for this rate has been increased to £500,000 until the 30th of June - it will then be dropped to £250,000 until the 30th of September.

However, it’s not just the stamp duty holiday that is encouraging investors to grow their portfolio. According to data from another buy to let lender, Foundation Home Loans, around one in six landlords are planning to expand their portfolio within the next 12 months - even after the stamp duty holiday ends.

George Gee, commercial director at Foundation Home Loans, said: “As we know landlords think long and hard before adding to their portfolios and, as our research reveals, they are unlikely to just confine any purchase activity to the first quarter of this year in order to simply benefit from the stamp duty holiday.”

Looking at activity in the market over the last few months, there is clearly an appetite for moving home amongst the UK population. This sharp rise in interest has famously caused house prices to rise dramatically, but they also caused rents to increase by a considerable amount as well. According to HomeLet, average rents increased by an average of 3% across the UK - with some regions experiencing annual increases as high as 8.1%. So, with this in mind, it’s easy to see why many investors consider this a lucrative time to expand their portfolio.

It’s no secret that UK property is one of the few asset classes that has managed to handle the uncertainty that the last 12 months have presented to us. Recent data from the Office of National Statistics has found that average house prices in the UK have increased by an impressive 7.5% in the year to January 2021, which clearly demonstrates the resilience of the UK property sector in a tricky market. Not to mention that this record-breaking demand has priced a lot of first-time buyers out of the market for the foreseeable future, so more people are renting for longer than anticipated. According to data from ARLA Propertymark, demand from prospective tenants in the UK rose for a second consecutive month in February, demonstrating that demand in the private rented sector continues to be stronger than ever.

There are plenty of reasons for buy to let investors to feel positive about the months ahead and as we start to go back to reality, we can expect the market to thrive for the foreseeable future.

Are you looking to expand your portfolio? Click here to see what we have available!

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Confidence in the UK buy to let market is growing

01 April 2021

New data has revealed that property investors have a growing confidence in UK buy to let after a turbulent time over the last 12 months. According to the buy to let lender Keystone Property Finance, there has been an increase in clients looking to apply for a buy-to-let mortgage - particularly those products offering larger loans. According to their data, Keystone found that the number of clients applying for larger loans has increased by 58% since December 2020, demonstrating a growing interest in UK property investment.

This new-found interest could largely be attributed to the stamp duty incentives introduced by the government that have now been extended until the end of September. The benefits of the stamp duty holiday for homebuyers have been widely publicised, but less so, are the benefits it has provided for investors. Ordinarily, landlords have to pay a minimum of 3 per cent if their property costs £125,000 or more. However, with the stamp duty holiday, the bracket for this rate has been increased to £500,000 until the 30th of June - it will then be dropped to £250,000 until the 30th of September.

However, it’s not just the stamp duty holiday that is encouraging investors to grow their portfolio. According to data from another buy to let lender, Foundation Home Loans, around one in six landlords are planning to expand their portfolio within the next 12 months - even after the stamp duty holiday ends.

George Gee, commercial director at Foundation Home Loans, said: “As we know landlords think long and hard before adding to their portfolios and, as our research reveals, they are unlikely to just confine any purchase activity to the first quarter of this year in order to simply benefit from the stamp duty holiday.”

Looking at activity in the market over the last few months, there is clearly an appetite for moving home amongst the UK population. This sharp rise in interest has famously caused house prices to rise dramatically, but they also caused rents to increase by a considerable amount as well. According to HomeLet, average rents increased by an average of 3% across the UK - with some regions experiencing annual increases as high as 8.1%. So, with this in mind, it’s easy to see why many investors consider this a lucrative time to expand their portfolio.

It’s no secret that UK property is one of the few asset classes that has managed to handle the uncertainty that the last 12 months have presented to us. Recent data from the Office of National Statistics has found that average house prices in the UK have increased by an impressive 7.5% in the year to January 2021, which clearly demonstrates the resilience of the UK property sector in a tricky market. Not to mention that this record-breaking demand has priced a lot of first-time buyers out of the market for the foreseeable future, so more people are renting for longer than anticipated. According to data from ARLA Propertymark, demand from prospective tenants in the UK rose for a second consecutive month in February, demonstrating that demand in the private rented sector continues to be stronger than ever.

There are plenty of reasons for buy to let investors to feel positive about the months ahead and as we start to go back to reality, we can expect the market to thrive for the foreseeable future.

Are you looking to expand your portfolio? Click here to see what we have available!

Anna Bibby

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