Larger buy-to-let investors to replace amateurs

Buy-to-let landlords with a small number of properties will exit the market due to the lower yields on offer.

That’s according to Alan Davison, personal finance distribution director at Together, who responded to news from the ONS that house prices have modestly increased by 0.2% year-on-year.

Davidson said: “House prices have risen, continuing the upward trend in a signal to a return in market confidence for both existing homeowners and buy-to-let investors.

“While is a consensus that rates will remain broadly flat for 2024 and a drop is unlikely, we expect more buy-to-let landlords who currently have a small number of rental properties will exit the market. They will be weighing up whether lower yields against higher mortgage costs are worth the time, upkeep, and potential maintenance investment needed on a reduced margin.

“That’s not to say activity will dwindle – far from it. We expect to see larger, professional buy-to-let landlords replace a bigger proportion of the amateur landlords currently in the market. And, due to the residential buy-to-let sector being mainly made up of smaller properties in the past; this move will mean more properties will become available for first time buyers – helping to ease supply and demand tensions.”