Landlords Less Optimistic on Buy to Let Property
A recent survey by CHL Mortgages polled 622 landlords and found that 25 per cent were less than optimistic about the buy-to-let sector. This was up from the 9 per cent reporting from six months prior. They also reported that less would be purchasing new property.
The new 10 per cent increase in capital gains tax was only a factor to 19 per cent that were questioning the profitability of buy-to-let investments. The reason for a drop in intentions to buy new property was due to lack of lending, and the requirement of high deposits. One half of all respondents reported difficulty in obtaining a mortgage or remortgage due to lack of lending, and one third sited the increased deposits as a factor.
While fewer intended to add property to their portfolios, more planned to retain their current properties than six months ago. Sixty-six per cent reported they would keep their properties which was a jump from 53 per cent.
Bob Young, Managing Director of CHL Mortgages said: "Given the speculation around the buy-to-let market over the last six months, particularly with regard to the increases in CGT and the potential for FSA regulation, it is perhaps unsurprising that landlords are less sure about the future for the sector than they were six months ago."
He added: "It is therefore entirely understandable that landlords are adopting more of a wait and see approach with both the overall future of the sector, and in terms of their plans to add to their portfolios.
"Clearly, landlords would like to see greater access to finance and perhaps less hefty deposit requirements, however, this seems unlikely given the current climate.
"What comes across from the survey is a clear view of the buy-to-let market as one in which professional landlords dominate, which in our view is no bad thing."