Brokers buoyed by professional landlords

Wednesday, 23 April 2008 12:00 AM

Mortgage brokers have seen their confidence buoyed by the prospect of continued purchases by professional landlords.

Following a survey of 3,179 mortgage intermediaries, it was revealed some 44 per cent believed professional investors would continue to acquire properties in the coming months.

A consensus also emerged such landlords may use the present moderation in prices in the UK property market to snap up some bargain purchases.

The same proportion of brokers, 44 per cent, felt professional investors would maintain their current portfolios, with only 12 per cent of intermediaries suggesting investors would seek to sell some of their properties, finds a survey carried out by The Mortgage Works, a specialist lending subsidiary of Nationwide.

The outlook in terms of both rental yields and tenant demand was also strong.

Some 40 per cent of intermediaries suggested yields would rise this year, and an overwhelming 94 per cent of intermediaries expecting tenant demand to either remain static or rise in some cases.

Additional demand is likely to be caused by first-time buyers delaying a property purchase while prices continue to fall.

Brokers were, however, less buoyant when it came to first-time landlords, with 62 per cent believing novice landlords would cease purchasing new properties in the coming year, and over half, 58 per cent, suggesting fewer first-time investors would enter the buy to let sector in 2008.

"Intermediaries are on the frontline of the mortgage market and so are well placed to assess the prospects of professional landlords," said Andy McQueen, managing director of The Mortgage Works.

"Clearly the current climate is not ideal for first-time landlords, given the limited number of deals available to them, but experienced investors may find excellent opportunities in a cooling housing market to purchase additional property."

The findings support those of the Royal Institution of Chartered Surveyors (Rics), which reports only two per cent of landlords are likely to make a sale in the near future.

Chris O'Toole

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