Rate rise fail to dent buy to let confidence

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Rate rises fail to dent buy-to let confidence

The second Landlords Optimism Index has revealed increases in the Bank of England base rate have failed to dent optimism among landlords about their investments.

Research from The Money Centre, one of the UK’s largest specialist buy to let mortgage brokers, shows that almost three-quarters of landlords rate their overall prospects as ‘very good’ or ‘good’, compared with just over seven out of ten in the last wave of research. Their optimism is rooted in the fact that most landlords see property as a long-term investment vehicle, not a route to short-term gain.

Almost seven in ten landlords still rate property as ‘above average’ as an investment and despite a slight reduction in rental yields for some, steadily increasing house prices means their portfolios continue to increase in value and outstrip other forms of investment.
Even as rents edge upwards, the rental market remains buoyant, boosting confidence further. Almost half of landlords have experienced no gaps at all between lets in the last year,

while the average time a property stands unoccupied is still only 15 days a year.

Lynsey Sweales, marketing and PR director at The Money Centre, said: “The change in approach is good for tenants as landlords are be keen to protect their investment with regular maintenance and improvements. Almost nine out of every ten investors do not see their buy to let property as their main form of income, and of those almost two-thirds see buy to let purely as an investment for the future. Higher interest rates may cause a little short-term pain for some landlords, but the majority know it’s an excellent long-term investment and are confident that it is still outperforming other investments, even in this higher-rate environment.”

Date: 26/07/07