Recent research conducted by The Mortgage Lender has revealed that a majority of buy-to-let landlords have expanded their property portfolios in the last year.

According to the findings, 52% of residential BTL landlords have increased their property holdings in the past year. This comprised 25% adding a single property and an additional 27% making multiple additions to their portfolios.

Looking ahead, over half of landlords expressed their intent to expand further in the upcoming 12 months. Specifically, 26% plan to incorporate an additional single property, while an equivalent percentage aims for multiple property additions.

Optimism prevails among the majority, with 74% expressing confidence in the residential property market for the next year.

Diversification emerges as a key theme, with 21% of landlords expressing a desire to diversify across different property types, and an equivalent percentage looking to expand their holdings across various regions in the UK. Furthermore, 20% cited improving Energy Performance Certificate (EPC) ratings as a motivation for portfolio expansion.

However, amidst the growth narrative, a significant number of landlords are engaged in property divestment. Thirty-one percent have sold one or more properties in the past year, and an additional 33% plan to do so in the coming year. Reasons cited include concerns over remortgaging due to rising interest rates (35%) and apprehensions about declining house prices (28%). Additionally, 23% sold a property in the last year to fund the acquisition of a potentially more lucrative investment.

Chris Kirby, Head of Key Accounts and Specialist Distribution at The Mortgage Lender, emphasizes the integral role of BTL in the residential property market. He notes, “BTL plays an important role in the residential property market, ensuring that there continues to be a good supply of quality and well-maintained rental properties to meet consumer demand."

In acknowledging the challenges posed by the economic environment, Kirby observes, “Last year’s high inflationary and interest rate environment saw unsettled confidence levels among prospective homebuyers, though for residential landlords our research shows they have not been as discouraged."

The data reveals a pragmatic optimism, fuelled by decreasing rates, rising average rents, and anticipated house price growth. Kirby concludes by advising landlords looking to expand their portfolios to seek informed guidance, ensuring strategic decisions in the upcoming year.