The outlook for the UK property investment landscape is positive for the 12 months ahead according to a recent survey of landlords.
Houses in multiple occupation (HMOs) and student property ranked the highest in terms of landlord confidence, a survey from The Mortgage Lender (TML) found, with 86% of the former and 84% of the latter reporting that they felt optimistic about 2024.
Portfolio landlords were also particularly optimistic about the coming year, with 84% saying they were confident about the future of the UK property investment market, while 78% were positive about their own rental properties specifically.
Overall, almost three quarters (74%) of buy-to-let landlords said they felt confident about the performance of the UK property market over the next 12 months, and more than a quarter (27%) described their sentiment as “very confident”.
UK property investment for long-term landlords
The research demonstrates that those who have worked within the UK property investment space for the greatest length of time, and with the widest range of properties, expect the greatest level of resilience in the country’s housing market in the near-term.
According to TML, 73% of property investors who had been operating for more than five years reported feeling confident about the prospects of their rental property portfolios for 2024, while 69% of those with less experience said they were confident.
Tenant demand has been soaring over recent years, due to a combination of people renting for longer and housing and rental supply levels depleting. This was also noted by 73% of landlords in the survey, who reported that tenant demand had risen over the past six months. A further 27% said there had been a significant increase.
This is one of the factors behind UK property investment remaining popular despite tougher economic conditions, as many buy-to-let landlords have seen their yields increase, and their void periods decrease – which for many is counteracting the effects of rising mortgage rates.
As a result of this, rental prices have also increase, and 73% of landlords in the survey have increased their prices over the past 12 months. While the dramatic price rises of recent years are expected to level off, the outlook is for them to continue to increase, buoyed by demand outstripping supply.
Buy-to-let is crucial for housing market
Around a fifth of all households in the UK, which amounts to around 4.4 million households, live in privately rented accommodation, and this figure has generally increased over the past decade.
Homeownership now happens later than ever in life, and this is down to a number of factors, including lack of affordability as house prices (and more recently mortgage costs) have increased, as well as renting becoming more of a lifestyle choice.
Renting can offer tenants the opportunity to live in a location or property they may not otherwise be able to afford, with the flexibility of signing up to a six-month or one-year contract should their circumstances change. Particularly in city centres, HMOs are an increasingly popular choice for groups of young professionals.
Chris Kirby, head of key accounts and specialist distribution at The Mortgage Lender commented: “Given the pivotal role that the BTL industry plays in supporting the residential market and ensuring the maintenance of the much-needed supply of homes, it’s encouraging to see these levels of confidence.
“Despite the fact that many landlords are facing higher operating costs, and additional to the inflationary pressures that are impacting everyone, the continued supply of good quality, well maintained rental properties is a must.
“For landlords who are looking to expand their existing portfolio, or remortgage their properties, it’s important to seek broker advice to ensure they are accessing the best possible opportunities in the coming year.”
BuyAssociation is a UK property investment company that specialises in connecting investors with developers in some of the country’s key locations. To find out more about our current UK property investment opportunities, get in touch today.
