Three-quarters of property investors set to buy more rental homes

Over three-quarters (76.8%) of UK property investors are considering buying additional investment properties over the coming year.

According to the perennially upbeat investment firm Assetz, a new survey of its investors shows confidence, with landlords highlighting strong rental demand as their main incentive for expanding their portfolios, also high and rising rental values, and the belief that prices are at or near the bottom.

Just 10% of investors believe now is a bad time to invest in UK buy-to-let, with the majority citing concerns about the economy as the main deterrent.

Investors are taking a long-term view of the property market, with 50% stating that long-term capital gain is their top priority, closely followed by rental income (44%). Just 6% stated that they were hoping to benefit from short-term capital gain.

Nearly half of those surveyed (45.9%) said they are currently achieving gross rental yields of more than 5.5%, with almost a fifth (19.4%) achieving 9% yields or higher.

Stuart Law, chief executive of Assetz, said: “Risk-averse lenders are making no secret of the fact that they would rather allocate the limited funds they do have to the lower-risk option of buy-to-let loans with deposits of typically 25–40%.

“The sector has not been as hard hit by the recession as originally feared, due to the fact that interest rates have remained extremely low. This has protected landlords by giving them cashflow, and future rate rises, which are likely to be small and gradual, will be covered largely by rental increases.”

Assetz says it has seen its sales of UK investment property more than double in the last 12 months and predicts it will expand at least 50% again over the next year