With income levels stagnant and the squeeze on disposable income growing, four in 10 of landlords questioned said they were having to use rental income from properties to help pay for their monthly outgoings.
The findings come from BM Solutions, which is part of Lloyds Bank, which also found that the second biggest reason for landlords investing in buy-to-let properties was to help supplement their retirement fund.
When questioned further, the importance of investing in property as a retirement portfolio for many landlords becomes apparent.
Buy-to-let properties boost investors’ pension funds
That’s because 75% of those responding to the survey said that their property portfolio was their pension fund. When calculated as an average, property investments constitute around 62% of all landlords’ pension funds.
Another of the biggest reasons for the increasing trend for people to invest in the buy-to-let property sector is a belief, held by more than a third of property investors, that their property portfolio offered a higher return on investment than shares would bring in the long-term.
They also added that investing in buy-to-let properties also carried a much lower risk than buying stocks and shares.
Phil Rickards, of BM Solutions, said: “We are increasingly seeing landlords having to use their rent income to help with their cost of living as the squeeze on spending goes on.
“More people are now entering the UK property market with many seeing it as a longer-term investment rather than a short-term one.”
Confidence in BTL sector is high
Confidence is rising among those buy-to-let investors, he added, and it’s now at the highest it has been for nearly seven years and is nearly at levels seen before the credit crunch struck.
The survey reveals that an astonishing 68% of landlords said they were confident about the prospects of the UK’s property investment sector which mirrors the growing confidence and optimism about the prospects for the wider UK economy.
However, the survey also found that a third of landlords say that demand from tenants for rental properties is starting to plateau which is the highest reported level it has been since the Spring of last year.
Areas with the biggest demand from tenants are in the East of England, with 49% of landlords reporting more interest, followed by London on 46%.
The number of voids being reported by landlords is also increasing slightly, according to the survey, with a third of landlords reporting they had at least one void in the previous three months.
