No sign of mass BTL landlord exodus
Concerns that regulatory and tax changes could lead to an exodus of buy to let landlords from the sector may have been premature, say researchers.
The findings from Foundation Home Loans reveals that a year after tougher lending rules were brought in for portfolio landlords - that's those with four or more mortgaged BTL properties - lots of investors have continued to invest in the country's property sector.
The firm's marketing director, Jeff Knight, said: "A year after the Prudential Regulation Authority's rules were brought in, it's fair to say they have not caused a mass exodus of landlords that many commentators were expecting.
"There were concerns, naturally, for landlords in the run-up to the latest PRA rules with them saying they thought it would be more difficult to source financing under the new regime. However, it's often the fear of change than actual change that is the issue."
Landlords say they intend to remain in the BTL market
The firm's research found that 19% of portfolio landlords say they intend to remain in the BTL market indefinitely and, on average, they are expecting to remain landlords for 15 years, which compares to 10 years for landlords without such a large portfolio.
Mr Knight adds that there is still an adjustment going on to the new rules with portfolio landlords often needing to supply extra information and documents than they had to in the past and the full impact of the PRA's new rules have yet to be felt, which is still creating some uncertainty in the sector.
The findings from Foundation Home Loans chime with other recent surveys that reflect that landlords with larger portfolios are looking to expand despite the challenges they face.
Portfolio sizes fall by 16%
Meanwhile, it's been revealed that the average landlord portfolio size has fallen over the last four years by 16%.
The news comes from lender Paragon who say that gloomy landlords are selling properties, though tenant demand is robust and, in many areas, is actually improving.
The firm says that portfolio sizes have dropped from nearly 15 properties on average four years ago to 12.6 properties today.
In a report, Paragon says that landlord confidence in the market is dropping.
The firm's director of mortgages, John Heron, said: "Landlords in the BTL sector have been subject to unprecedented regulatory and tax changes and they are cautious, understandably, about their future.
"Many have already taken action against the impact of these changes, including a reduction in gearing and selling some of their properties."
Mr Heron says landlords are still facing future issues, including the impact of mortgage interest tax relief being removed and the