Eight out of 10 brokers believe the north will become a hotspot for landlords during the next year, research revealed.
Brokers think landlords will expand their portfolios in the north, rather than London and the south east, in an attempt to secure the best property yields.
More than two thirds (69 per cent) predict landlords will streamline their portfolios, selling properties with lower yields, and 45 per cent believe that landlords will look to invest in university towns and student accommodation.
The findings are based on a survey carried out at Legal & General Mortgage Club’s recent buy-to-let (BTL) forum, where brokers were quizzed on the market’s development following a series of legislative changes that came into effect last year.
The news follows a range of strong data pointing to a buoyant market in parts of the north, including figures showing buy-to-let yields in the region were the highest in the country during the second half of 2016.
Several brokers recently told FTAdviser they were witnessing a surge in interest from buy-to-let investors moving out of the London market after being hit by higher stamp duty rates and the reduction in higher rate tax relief.
Jeremy Duncombe, director of Legal & General Mortgage Club, said: “Over the past 12 months, the buy-to-let market has experienced a myriad of legislative changes.
“Today’s research from Legal & General Mortgage Club’s inaugural buy-to-let forum shows one of the impacts of these developments, with developers looking north for value. Landlords are resourceful, and this demonstrates the resilience of the market, despite many changes.
“The last year has been a particularly challenging year for buy-to-let. The stamp duty hike, coupled with the changes to tax and the Prudential Regulation Authority legislation affecting landlords with four or more properties, has undoubtedly impacted the purchase market in particular.
“However, it is reassuring to see that confidence in this essential tenure remains as landlords respond and adapt to this new landscape.”
Michelle Lawson, director at Portsmouth-based Lawson Financial, said she had not seen a dip in interest from people looking for buy-to-let properties.
“People who are still buying buy-to-let are doing so relatively locally at the moment,” she added. “I think it is just London they are trying to avoid.
“I was at a conference in Fleet recently and people were saying they are quite concerned landlords who don’t want to buy down south are relying on estate agents up north and buying in a dull area that they will not get any interest on.
“I think people should still be looking at an area they know.”
simon.allin@ft.com
