Britain’s Buy-to-Let market remains incredibly robust despite Brexit and economic uncertainty

London 7 November 2016: The latest wave of Bank of Ireland UK’s Buy-to-Let Market Index shows that Britain’s BTL market remains remarkably resistant, rising to almost record highs despite several months of economic uncertainty.

The nationwide research of landlords and property owners across the UK shows that in spite of the shock result of the EU referendum and a number of regulatory and taxation changes, confidence in the BTL market remains high.

In fact, more than half of landlords (54%) think that the vote to leave the EU will make no difference to their BTL investments – and one in five (19%) believe that Brexit will actually be beneficial to their business.

This suggests that in times of economic uncertainty, investing in property is regarded as a particularly attractive proposition.

The study found that almost half (46%) of current landlords with two or more properties expect to increase the size of their holding over the next few years. Furthermore, 52% of homeowners would like to become a BTL landlord (if they were able to afford it) and the increasing demand for private rental property means that 48% of people are more likely to invest in buy-to-let.

Interestingly, being able to afford to a property is no longer the main barrier for homeowners looking to become BTL landlords. This was the case earlier in 2016, but now being able to find reliable tenants is the biggest concern.

This implies that people are more financially confident, something that is endorsed by the fact that affordability is currently at a record high. Property owners feel that their mortgage payments are easily affordable at the moment, a sentiment that is consistent across the UK.

Despite this buoyancy, however, over half (55%) of landlords admit that it’s likely that they will increase rents and more than a third (38%) are likely to switch mortgages in order to reduce the impact of tax relief changes on mortgage interest payments.

Mark Howell, Director of Marketing & Customer Management, Bank of Ireland UK Mortgages said: “The tenth wave of our index shows that attitudes towards the buy-to-let market remain incredibly positive. Despite a number of events which were expected to have a negative impact on the sector, homeowners and landlords continue to see BTL as a solid long-term investment. It’s really encouraging to see such confidence in the market, and I am particularly pleased to see that the Mortgage Affordability Index has risen to record highs.

“Landlords do, however, need to be aware of the impact that George Osborne’s tax changes will have on the sector and ensure that provisions are made to protect against this.”

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Note to Editors:

1.Survey of 400 British property owners in September 2016

• 200 private landlords (small landlords only, those with under 10 properties in their portfolio) (Where it refers to landlords with two or more properties, this is a base of 116)
• 200 homeowners (who either own their own home outright or are buying it on a mortgage)
• 400 Property Owners in total

2.The BTL Market Index is formed by aggregating and averaging four index scores, each of which is measured on a scale of 0 to 100:

1. MAI Mortgage Affordability Index (how affordable overall are your current mortgage payments, for all your UK properties taken together- from 0 = not at all easily affordable to 100 = very easily affordable).
2. PPI Property Prices Index (belief that property prices in this region will rise faster than inflation in next 12 months- from 0 = not at all likely to 100 = very likely)
3. RVI Rental Values Index (belief that rents for private property in this region will rise faster than inflation in next 12 months- from 0 = not at all likely to 100 = very likely)
4. NPI New Purchase Index (likelihood of buying another UK property on a mortgage or outright over next 12 months, to rent it out - from 0 = not at all likely to 100 = very likely)