A new report from Aldermore has suggested that 4 out of 10 UK landlords could be set to expand their BTL portfolios within the next 12 months. This news may come as a bit of a surprise to the reader especially when you consider the fact that new tax legislation is squeezing margins more than ever for Buy-to-Let investors. This more buoyant outlook certainly does suggest the willingness of property owners to remain active in the market.
One could argue that there is less inclination for expansion among those with fewer than 4 Buy-to-Let properties but around 20% of these landlords have stated that they do still intend to add to their property investments in the coming months. On the other side of things, only 8% of private landlords have stated that they intend to reduce the number of properties that they own.
Unsurprisingly, most within this group were reducing their portfolio due to the result of new government legislation with the increase in restrictions and higher taxes the most predominant factors. There is little doubt that these changes have contributed significantly to the fall in Buy-to-Let lending over the past year despite remortgaging increasing by 25% in this sector.
To us, the report suggests that the majority of landlords are being realistic about the current health of the market and there is little denying that the Buy-to-Let sector has taken a bit of a battering recently. An optimal solution for many seems to be the restructuring of portfolios – something we have a lot of experience organizing for our clients.
Perhaps the most encouraging aspect of this report is the apparent willingness among landlords to continue to invest in property despite the current challenges within the market. Some industry commentators would have you believe that the BTL market is not in good health but the optimism of landlords appears to suggest otherwise.
Another area of interest within the Buy-to-Let market was the news that the number of landlords remortgaging for the purposes of raising capital for property improvements had also increased. Essentially, this means that more landlords than ever before are choosing to remortgage properties for the purposes of raising capital for home improvements with 5.6% of remortgage capital having been used for this in the 12 months to the end of March 2018.
When you consider the fact that in 2016 this percentage was sitting at just 1.9% then you can really begin to see that there has been a dramatic increase in remortgages with additional capital raised for the improvement of properties. Unsurprisingly, landlords in London applied for the most money to spend on improvements at around £35,470 on average.
When it comes to increasing a property portfolio, it can often be a good idea to consider restructuring the assets within the current portfolio to find the best combination of mortgages. This can allow landlords to raise capital as well as ensure they are getting the best rates on their properties.
This is something that we specialise in here at Specialist Mortgages so if you’re looking to increase your portfolio in the most cost-efficient manner possible then give us a call on 0345 873 1234 and we can have a chat!