One in four landlords would consider using a lump sum from their pension to invest in property, with a further 24% undecided, research from BM Solutions shows.
The quarterly BM Solutions / BDRC Continental Landlord Panel revealed that while 77% of landlords view their property portfolio as part of their pension provision, 38% are not planning to withdraw a lump sum from their pension to invest in property or don’t have enough in their pension to do so. This rises to 48% for landlords with larger portfolios (20+ properties).
However, confidence in the UK private rental sector continues to ease, with 53% reporting positive expectations over the next three months compared to 61% who said this in Q1 2014. As such, the research found almost one in seven landlords purchased a property in Q1 compared to one in five in Q4, with three in 10 intending to do so in 2015. Nevertheless, three in 10 landlords are still looking to expand their portfolios in the next 12 months.
At the same time, the buy-to-let market has continued its strong start to the year, with the incidence of rental voids and tenant arrears falling to an all time low, as just 29% of landlords experienced a void period in Q1 and just over a third (35%) having faced tenant arrears in the past year. Tenant demand remains high in Q1, with 38% of landlords reporting demand had increased whereas only a minority (8%) found tenant demand to have declined.
The average buy to let portfolio is now worth £1.2million and generates a gross rental income of £53k a year. With the average portfolio having 7.9 properties in Q1, this equates to a per property value of £150,000, each generating an average of £6,700 in rental income. Portfolios in Central London generate the highest gross rental income at £78,000, with Wales the lowest at £44,000.
Source: Mortgage Introducer