A survey by Simple Landlords Insurance completed by more than 1,400 landlords shows the private rented sector continues to thrive as the UK housing shortage prices most first-time buyers out of the market.
Despite the re-elected Conservative government’s Help To Buy scheme, which proposes to build 200,000 homes during the course of this parliament, a third of those who responded said they intended to increase the number of their properties in the next two years.
Most industry commentators agree that 200,000 per year over the next five years would be needed to bridge the current housing gap.
And if buy-to-let mortgage lending rates are anything to go by, the market shows no signs of slowing down, with figures released by the Council for Mortgage Lenders showing that loans had leapt by 21 cent during the last year to 18,200.
Reflecting this boom in lending, the Simple Landlords Insurance survey showed that forty-eight per cent of respondents owned more than two rental properties while 11 per cent had more than five.
Furthermore, the Simple landlords Insurance Survey showed 56 per cent of respondents had made a conscious decision to invest in a buy-to-let property reflecting the demand for housing in their areas.
The figures also showed that 78 per cent of landlords were confident they could find a new tenant for their property within four weeks if it were to become unoccupied.
Mark Alexander, of Property118.com, told Simple landlords Insurance that in his opinion help to buy schemes would not affect the private rented sector.
He added: “We just cannot develop enough land to satisfy the housing need and there is not enough planning permission for the land we do have. There are not enough construction skills and there is not enough funding to meet the demand.”
Perhaps reflecting the business model of most private landlords, the Simple Landlords Insurance Survey found that 55 per cent of its landlord respondents held rental yield as their motivation for investing.
And this should come as little surprise when figures released by LSL Property Services last month are taken into account.
They showed that average UK rents had grown 4.6 per cent year-on-year – the fastest rate of increase since November 2010.
Tellingly, 24 per cent of landlords responding to the Simple Landlords Insurance Survey said they planned to increase rent in the next 12 months.
And so with rents now at a record high it is perhaps equally unsurprising that the predominant reason landlords gave for having to evict a tenant over the last two years, at 65 per cent, was rent arrears.
The region with the best performing buy-to-let market compared with national figures in the Simple landlords insurance Survey was south central England.
Sixty per cent 60 per cent of respondents were conscious landlords, compared to 56 per cent nationally.
Fifty-nine per cent of landlords in south central England said the longest their properties had remained unoccupied was less than a month – compared with 51 per cent nationally.
And 36 per cent of south central England landlords said they were looking to increase the number of rental properties they owned in the next two years, compared with 33 per cent nationally.
Landlord Voice also compared the survey against quote data from Simple Landlords Insurance which highlighted how the popularity of some cities as buy-to-let destinations had seen some striking variations during the course of the last five years.
The Simple Landlords Insurance data showed that the UK’s fifth most popular buy-to-let destination was now Cardiff, which had leapt nine places from 14th, while rapidly developing Hull had risen 14 places during the previous five years – from 28th to 14th.
But Edinburgh and Glasgow had seen a real dip –falling by seven and five places respectively during the last five years from 12th to 5th and from 8th to 13th.
The Edinburgh and Glasgow results reflected a Citylets survey which found nearly a third of Scottish landlords might leave the private rented sector if grounds for repossession were changed in-line with the Scottish Parliament’s New Tenancy For The Private Rented Sector Consultation.
Please visit Simple Landlords Insurance for a full breakdown of the UK figures.