Private landlords confident UK economy will recover
Published by Max Salsbury for 24dash.com in Housing and also in Finance
Private rented sector landlords’ confidence in the UK’s financial markets has tripled over the last year, according to research by the National Landlords Association.
Just under a third (31%) of PRS landlords rate their expectations of the UK’s financial markets as "good" or "very good" in the coming months, a rise of 21% from the same point last year.
Additionally, over a quarter (27%) told the survey that they plan to acquire new property over the next 12 months.
However, landlords’ perceived buoyancy is tempered by the finding that moderate rises to interest rates would put pressure on their ability to meet mortgage repayments.
Just over a fifth (21%) said keeping up mortgage payments would be difficult with interest rate rises of just 2%. A third (35%) would struggle to keep up payments with a rise of 2.5%, and two fifths (41%) with a rise of 3%.
The Bank of England recently outlined that interest rates will remain at the current low of 0.5%, with the first rate increases likely to happen in late 2015.
Carolyn Uphill, NLA chairman, said: “Landlord optimism around the UK’s financial recovery, coupled with the Bank of England’s announcement makes good reading for anyone considering buy-to-let investment. This is evidenced by the significant number of landlords who will be looking to add property to their portfolios over the coming months.
“However, it’s inevitable that interest rates will rise as the economy improves and we move out of recession and our findings show that moderate increases would leave many landlords stretched in meeting their mortgage repayments.
“Anyone thinking about buy-to-let investment should do so with a view to long-term sustainability, and vital to this is adopting a professional approach to your lettings business."