A stable income and a boost to insufficient pension provision are the two top priorities of buy-to-let investors wishing to make a new investment over the next 12 months.
Buy-to-let firm Assetz says in its annual Buy to Let Investor Survey that confidence in the UK market is robust, with three-quarters of investors stating that they intend to buy additional investment properties over the coming year, as low savings rates and poor returns on the stock market limit income.
Only 5% felt that now is not a good time to invest in residential property, the main reasons being the belief that prices have further to fall, difficulties in securing mortgage finance, and concerns over the financial security of tenants.
Investors are taking a long-term view, with 65% stating that rental income for retirement is their main motivation, followed by long-term capital growth (27%). Just 8% cited short-term capital growth as their reason for investing.
A large proportion are buying either outright with cash or with a very small mortgage, meaning they are not facing the usual hurdle of securing finance, faced by homebuyers. Over half (55%) stated they will be using a low loan-to-value mortgage or buying outright, with 23% refinancing their home or an existing buy-to-let and 22% using a high LTV loan.
Most of those surveyed (68%) said they are currently achieving gross rental yields of more than 6%, with almost a fifth achieving 9% yields or higher.