Did most landlords actually expand their portfolios i...

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30 January 2024

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Did most landlords actually expand their portfolios in 2023?

A majority of Buy to Let landlords have been focused on growing property portfolios in the last 12 months, and not selling up.

That’s the claim in new research from The Mortgage Lender.

It days that in total, 52 per cent of residential BTL landlords have added to their property portfolios in the last 12 months, with 25 per cent having added a single property and a further 27 per cent adding multiple.

Looking ahead to the next 12 months, expansion continues to be on the agenda for more than half of BTL landlords.

Some 26 per cent of landlords plan to add another single property to their roster, and another 26 per cent plan to add multiple. This may be attributed to positivity in the market, with 74 per cent confirming they are confident in the residential property market for the next 12 months ahead.

The research looked into what has prompted landlords to add to their portfolios. Increased tenant demand (31 per cent) came out top, while 25 per cent said they grew their portfolio because they had spare capital to deploy.

Residential landlords have also been keen to diversify their portfolios across different property types and regions across the UK (21 per cent), while 20 per cent added to their portfolio because they wanted to buy a property with a better Energy Performance Certificate rating.

While many have been growing their portfolios, there are some landlords who have been selling their properties, with TML reporting that 31 per cent having sold one or more of their properties in the last 12 months and 33 per cent planning to do so in the next year. The reasons for the sell offs are rising interest rates, concerns over falling house prices, and preferring to buy another that was a better investment.

Chris Kirby of The Mortgage Lender, comments: “BTL plays an important role in the residential property market, ensuring that there continues to be a good supply of quality and well-maintained rental properties to meet consumer demand. Last year’s high inflationary and interest rate environment saw unsettled confidence levels among prospective homebuyers, though for residential landlords our research shows they have not been as discouraged.

“Many are taking opportunities to grow their portfolios, and with rates reducing, average rents increasing and house price growth predicted, landlords have good reason to be optimistic. It certainly paints a positive picture and highlights the continued interest in BTL as an asset class.”

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