British landlords remain upbeat about buy-to-let

Property investors remain confident about the prospects for the buy-to-let market in 2008, contradicting recent reports of a possible slowdown, according to a survey of landlords by Bradford & Bingley Group.

Many have plans to increase their portfolios over the coming months with rental yields holding steady at 5.72%.

Confident landlords undaunted by reports of a slowdown

Contrary to some recent accounts that the buy-to-let market is heading for a crash, the Bradford & Bingley Group landlord confidence survey of over 3,800 British landlords shows that 60% of those surveyed are categorically undaunted by these recent reports. Such is their confidence in the market that 86% of all respondents are planning to either increase or leave untouched their portfolio of properties over the next six months. To further support this, the average size of respondents' portfolios currently stands at 6.1 properties, an increase from an average of 5.7 just six months ago.

Rental yields remain steady

Confidence about rental yields is also high, with the fundamentals that have underpinned growth in the buy-to-let market remaining strong. Tenant demand continues to strengthen, driven by an increasingly mobile and fragmented population, and a shortage of affordable housing stock for sale.

Rental yields remain steady at 5.72%, up from 5.71% in October 2006.

Geographical areas commanding the highest levels of rent include the East Midlands (6.02%) and Scotland (6.01%). The South West was the area which experienced the highest overall percentage rise, during this period.

Rental yields went up by 7% in this area since October 2006.

When asked about the prospect for rent levels over the next six months, 95% of those surveyed believe rental yields will remain robust, with a third (33%) expecting them to rise and 62% expecting them to stay at the same level.

When asked about current rent levels, well over a third (37%) said that they were higher than 12 months ago, with over half (52%) stating that there was no change in levels over the same period.

Weathering the storm for the long-term

Despite the economic challenges ahead following the fallout from the "credit crunch" , property investors are prepared to weather the storm in the markets and are in it for the long run. When asked about their reasons for investing, nearly half (47%) said that they were investing for capital growth, whilst 43% are hoping that their properties will provide them with a pension for retirement.

Jeremy Law, head of buy-to-let, Bradford & Bingley comments: "Over half of our landlords report that they have added to their portfolio this year which is extremely encouraging and indicates that the prospects for the sector remain positive in 2008. Their views are the most authoritative in the industry as they are expressed by those who are at the coalface of the buy-to-let market. These are the people on the ground who are researching their areas, taking out the mortgages, buying, maintaining the properties and managing the tenants, therefore their opinions are important.

"The social and demographic trends that have been driving the market continue to remain strong with rental demand remaining robust. If house prices stagnate or fall, we are likely to see demand for rental properties strengthening, leading to improved rental yields. The results from our landlord confidence survey, together with the economic indicators surrounding buy-to-let, reveal that the sector is most definitely here to stay and will remain strong."