Landlord News

Survey reveals why landlords have recently decided to invest in buy-to-let

Em Morley - May 19, 2021

More than a third (34%) of landlords have recently purchased another buy-to-let property (BTL) or intend to buy one within the next nine months, a survey by The Deposit Protection Service (The DPS) and Zephyr Homeloans suggests.

Their poll of over 300 landlords received results suggesting that the ‘opportunity to buy at a discount’ is the most common reason why they recently bought or intend to buy an additional rental property. Other key factors include long‑term investment (35%), Stamp Duty savings (34%) and diversification by either location (26%) or property type (23%).

Paul Fryers, Managing Director at Zephyr Homeloans, comments: “Understanding the purchasing motivations behind professional landlords is an essential factor for Zephyr and our mortgage broker clients.

“It’s equally important to recognise and appreciate some of the challenges landlords have been facing during the past year and how they will affect their current and future applications.

“During the pandemic we saw a significant rise in the use of limited companies to buy and manage property portfolios, and it seems a significant proportion of landlords have made the most of the opportunities provided by the buoyant market conditions we have experienced over the past six months.”

The poll also shows that 43% of landlords have temporarily lowered rent prices during the pandemic to help tenants. 22% said they had refinanced their mortgages since the arrival of coronavirus.

Matt Trevett, Managing Director at The DPS, comments: “Although the buy-to-let market has remained more buoyant than some predicted, the last year has not been without its challenges for many tenants and landlords.

“The survey suggests a large proportion of landlords have been acting to support their tenants, with a significant proportion saying they had temporarily lowered rents during the pandemic.

“A recent survey from The DPS also showed that the pandemic has triggered movement from cities to towns and the countryside, so landlords seeking to rebalance their portfolios may look to make purchases that reflect that trend.”

The survey results also suggested that:

  • Only 7% of landlords have taken a mortgage holiday 
  • 13% of landlords have sold a property during the pandemic 
  • Landlords who did not purchase additional BTL properties over the last year cited ‘declining rental yields’ (51%) and ‘concern about economic stability’ (42%) as their main reasons