Diversity is key when it comes to landlords looking to maximise their current and future portfolios. Choosing different property types represents one route, with an increasing number of landlords incorporating houses in multiple occupation (HMOs), off-plan new builds and short-term lets into their portfolios. Another route is via investment in a different location, especially in those places where yield is historically strong, and rising.
One of the growing themes we’re seeing from portfolio landlords is their willingness to look at all regions across the UK when it comes to purchase opportunities, specifically those where they might find lower-priced properties with stronger rental yields. The search for yield is a constant one, and there are now many products available from specialist lenders – such as Foundation Home Loans- which have a lower minimum loan sizes to help those landlords who want to add, or refinance, such properties within the portfolio.
In terms of location, a vast majority of landlords have revealed their acquisition plans for the year ahead, with the North West expected to be the busiest region. A study by BDRC found that more than one in five landlords (22%) plan to buy in the North West, followed by the South East and Yorkshire & The Humber – where 16% of landlords are targeting new properties. Regions reporting a higher proportion of buyers than sellers in the next 12 months include the East and West Midlands, as well as the South West and North East. Some 68% of buyers plan to fund their next purchase with a buy-to-let mortgage, while just 18% will release equity from existing properties. Demand for mortgages is similar across all portfolio sizes, although 23% of landlords with 11-plus properties plan to release equity.
The North West is a region which has been a hot bed for property professionals for some time, and there is no reason to suggest this won’t continue. A recent landlord survey from Simply Business highlighted London and Manchester as the most attractive cities for buy-to-let investment in 2020. When asked – which city represents the best investment opportunity – these two cities received over a third (18% each) of votes. Liverpool and Birmingham came in joint second with both cities securing 10% of landlord’s votes.
With lower entry points, strong rental yields, widespread regeneration and potential capital appreciation, it’s clear that demand is rising for a range of BTL solutions to meet the diverse range of property-related opportunities emerging throughout this region. And advisers with portfolio landlord clients who fit this bill should contact their BDM today to find out how Foundation can support them in this and many other areas of BTL lending.
Find out how Foundation can help your portfolio clients here.
