The national landlord survey found nearly half (48%) believe that it is a good time to invest in property, with just 1% of investors looking to reduce the number of properties in their portfolio.
Of those looking to grow their portfolios, 82% said they were doing so because of low property prices, with 53% saying that strong demand was behind their decision to expand.
However, obtaining mortgage finance remains a problem for a number of landlords, with half of those surveyed believing that it is more difficult to raise mortgage finance than it was 12 months ago. In addition, 45% of landlords who have recently taken out a mortgage admit that repayments are more expensive than at this point last year.
David Brown, commercial director of LSL Property Services, said: “Mortgage finance is not just a problem limited to first-time buyers. The level of buy-to-let lending may be steadily climbing, but it is still just a third of the level five years ago, and securing finance remains a serious stumbling block for many landlords.
“The private rented sector is still crying out for more investment, and closing the gap between supply and demand is dependent on a growing number of investors being able to access the affordable mortgages they need to increase the pool of rental properties available.”
LSL found that 44% of landlords have witnessed a rise in tenant demand in the past six months, with nearly two-thirds of landlords expecting rises to continue during the next 12 months. Because of this, 40% of landlords expect to increase rents during the next year, by an average of 4.5%.
Brown added: “The majority of landlords expect tenant demand will increase in the future, and as long as lending to first-time buyers remains in the doldrums, and new house building remains subdued, we won’t see demand for rental accommodation tail off.
“In these conditions, while affordability may increasingly come into play as landlords set rents, they are far more likely to continue to rise than tumble in the coming 12 months.”
