By: Madalena Penny
With eight consecutive months of rent rises, LSL Property Services has revealed that 71% of landlords surveyed are finding it increasingly difficult to secure lending to increase their portfolios despite the wave of tenant demand and regardless of the rise in rents the sector is presently experiencing.
Legal 4 Landlords financial director Binder Dhillon said:
“LSL’s research indicates an irony within the growing private rented sector, tenant demand is at an all time high, yet lending to increase supply of buy-to-let properties is as yet to provide realistic lending terms and products to landlords.”
48% of landlords surveyed by LSL agreed that the present was a good time to invest in buy-to-let. The study reported 50% of landlords had experienced a rise in tenant-demand, with 69% expecting further increase in the next 12 months.
David Newnes, managing director for LSL said:
“The government’s Spending Review last month is expected to swell the ranks of tenants as potential social sector tenants opt to enter the private rented sector, instead of facing long waiting lists for social housing where they can expect to pay 80% of market value. An increase in the supply of rental accommodation will be necessary to meet this demand – and many landlords recognise this as an opportunity for investment.”
‘The private rented sector is crying out for more investment to meet the boom in tenant demand and landlords hoping to expand their portfolios will be relying on an improvement in lending conditions.
‘More lenders are now starting to enter the market, which should mean there are more affordable products available to landlords. However, overall lending is not expected to loosen significantly in the next couple of years.’
Mr. Dhillon added:
“This year alone, we have seen a significant increase in landlord enquiries, with tenant referencing services doubling since June because of the sustainable growth of letting agents and the introduction of the reluctant or accidental landlord. It appears to point to an overall direction of what the sector can expect.’