Research completed by the Bank of Ireland shows that over the next few years a significant number of buy-to-let landlords are planning to increase their property portfolios. The bank’s UK buy-to-let market index stated that nearly 46% of landlords that already own two or more homes are expected to increase their portfolio. This is compared to only 20% of UK landlords who increased their property portfolios in 2011.
Reports suggest that the average portfolio size has increased to an incredible 14 properties. This is despite the recent changes that have been designed to decrease the housing market and create what George Osborne (former chancellor) described as a ‘level playing field’ between homeowners and investors. The study also revealed that more than half – 52% – of homeowners would also like to become a buy-to-let landlord.
Some of these recent changes include the scrapping of the 10% Wear and Tear tax relief for landlords who rent out furnished homes and the introduction of the 3% stamp duty surcharge in April; as well as the pending abolishment of mortgage tax relief, which is set to be phased out from next year. This proves that the buy-to-let market remains resilient to the economic uncertainty created by the referendum vote in June to leave the EU. This is shown by the fact that 54% of landlords think that their buy-to-let investments will not be adversely affected by the Brexit vote, while one in five – 19% – believe that Brexit will benefit their investment.
The findings from the research also show that 55% of landlords expect to increase rents in the near term (if they have not done so already), while 38% of those surveyed said that they are likely to switch mortgages to cut their costs which will help them cope with the impact of the tax relief changes on mortgage interest payments.