The buy-to-let market remains an intriguing part of the UK property investment sphere. Despite various challenges such as modest yields, a recent survey by Landbay offers insights into what landlords are contemplating for the coming year.

Landbay’s recent survey sheds light on the current mindset of buy-to-let landlords. Notably, about a third (32%) of them are considering expanding their portfolio in the next year. This is quite a significant number, especially given the challenges in the current market, such as sluggish yields. But what’s driving this intent?

The Key Motivations for Property Expansion

Several factors have been highlighted by the landlords who are keen to purchase more properties:

1. Building Their Portfolio: A whopping 78% of those looking to buy are doing so to grow their portfolio. This suggests a long-term vision and a belief in the enduring appeal of the rental market.
2. Increasing Number of Tenants: About 38% of the respondents have noticed an upswing in tenant numbers, signalling a growing demand in the rental market.
3. Anticipated Decline in House Prices: Around 34% are influenced by the potential drop in house prices, seeing it as an opportunity to buy low and, perhaps, sell high later.

Rob Stanton, Landbay’s business development director, comments on this trend: “We’re observing a significant demand for rental properties. Many landlords are seizing this moment, not only to cater to this demand but also to capitalise on declining house prices and other landlords deciding to exit the market.”

Regional Disparities in Buy-to-Let Intentions

Geography plays a role in the buy-to-let ambitions. While the Midlands and the North of England seem to be attracting more attention, the traditionally pricier South, including London, is less popular.

• Midlands & East of England: About 46% of current landlords in these regions are considering another property purchase in the next year.
• The North: The sentiment remains strong, with 39% looking to buy.
• London & the South: In contrast, only 23% of landlords have plans to expand here.

Rob Stanton elaborates on this geographical trend, suggesting that there are more discernible opportunities in regions like the Midlands and the North, compared to the more expensive South.

The Big Players in the Market

It’s also worth noting the makeup of these prospective buyers. Portfolio landlords, or those who already own multiple properties, are the most keen:

• 11 or More Properties: 44% of these landlords are looking to add to their collection.
• Four to Ten Properties: 26% have expansion plans.
• One to Three Properties: Around 30% of smaller-scale landlords are considering buying more.

The Other Side of the Coin

While a good number of landlords are looking to expand, there are those hesitant about diving deeper into the buy-to-let market. Their reservations are primarily due to:

1. A lack of necessary funds.
2. Increasing interest rates.
3. Governmental factors such as the Renters Reform Bill.