Recent findings from a major study of buy-to-let investors, conducted by flexible buy-to-let lending specialist Mortgage Trust, has revealed overwhelming market confidence in the sector with landlords expecting to grow their portfolios by an average of 18% in the next 12 months.

The typical landlord’s portfolio contains 3-4 properties and has an average value of £763,400. They expect to boost their portfolios by at least one property (some up to 5) within 12 months with optimism running high among large and small landlords alike.

Despite critics’ claims that supply of rental property is outstripping tenant demand, the average vacancy period per year is less than 3 weeks, with the vast majority (78%) experiencing vacancy periods of less than 4 weeks. This low vacancy rate shows no signs of deterioration, being broadly the same over the past 2.5 years. This demonstrates that the strong growth in buy-to-let investment supports continuing strong tenant demand. See Figure 1.

Figure 1: Void Periods

Adding further support to the view that buy-to-let is still growing robustly, the findings reveal that landlords’ gearing is at comfortable levels.

Almost 50% of investors have borrowings of less than half the value of their portfolios, which not only debunks the doom-mongers’ claims that the buy-to-let market is vulnerable to house price declines and an increase in the cost of finance, but also demonstrates that landlords have plenty of equity for further expansion.

Austin Jelfs, Head of Sales & Marketing at Mortgage Trust observes, “The buy-to-let market is still strong and growing and it looks set to stay that way for at least the next 12 months with investor confidence as buoyant as ever. This has been reflected by the number of new products being launched across the sector, offering investors a wider range of choice and rates.”