BTL sector plans ‘significant investment in 2015’

(23/12/14)

Confidence in the health and security of the buy-to-let (BTL) market will lead to an increase of investment next year, despite the fact that more than half of investors believe that interest rates will rise during 2015.

This is according to the latest research from Platinum Property Partners, which surveyed 500 UK BTL investors.

Almost 30 per cent said interest rates were their biggest concern going into 2015, with 42 expecting an increase of less than two per cent, while ten per cent predict that it will be more.

However, the idea of a looming hike in rates hasn’t dampened the spirit of landlords, as 43 per cent intend to expand their portfolio during 2015. Of these, 23 per cent plan to purchase one additional property and 14 per cent are expecting to buy two or more BTL houses over the next 12 months.

The study has revealed that landlords owning Houses in Multiple Occupation (HMO) for young professionals and key workers investors have the biggest ambitions for 2015, with 52 per cent planning to expand their BTL portfolio next year.

It would appear that landlords still feel confident about capital growth, despite recent reports suggesting the housing market is slowing down.

The Council of Mortgage Lenders (CML) has described the current dip in mortgage lending as evidence that there has been a “plateau” in housing market activity, but survey respondents still have faith that price growth will continue over the next five years.

Almost half (49 per cent) expect UK property values to rise by up to ten per cent between now and 2020, while a further 28 per cent have predicted that it will achieve a bigger increase.

Steve Bolton, founder and chairman of Platinum Property Partners, commented: “A rise in interest rates is one of landlords’ main concerns for 2015, yet the majority don’t anticipate that these rises will be dramatic or unaffordable.

“As a result, our research reveals that the sector will continue to grow next year, with two in five planning to add to their BTL portfolio despite a likely interest rate rise.”

He added that investors can never guarantee the level of return they achieve, and even veteran landlords need to do their research and seek advice before parting with any hard-earned cash to maximise their profit potential.