Scottish landlords would tell others to invest in buy-to-let homes, survey finds
Three-quarters of private rental landlords in Scotland say they would recommend buy-to-let as an investment, according to a new survey conducted by tenanted property sales specialists Portolio.
The survey found that 78% of those questioned would urge others to buy homes for rent as a long-term investment.
Highlighting an optimistic outlook for the private rental sector, 71.5% said they believed average property prices would increase in the next five years.
Examining the immediate impact of the coronavirus pandemic, 61.8% reported no increase in rent arrears over the past 12 months. However, about a third (30%) of those who took part in the survey agreed that the impact of the outbreak had changed their buy-to-let strategy.
The founders of Portolio said the findings further strengthen the sector’s credentials as a strong investment prospect, despite general economic uncertainty.
Findings emerged following a survey of 300 landlords, letting agents and property professionals. Collectively, Portolio estimates they are responsible for 10,000 homes across Scotland.
Chris Wood, managing director and co-founder of Portolio, said: “We have all changed our outlook on a great many things since the beginning of the Covid-19 pandemic - and property investment should be no different. However, it’s clear that property investment is still worthwhile.
“As an asset class, its ability to leverage funds is a huge plus. The long term nature of buy-to-let investing means it can, and should, ride the ups and downs that the economy throws at us. Buying at the right price - a fair price - is the ticket.”
On the change in investment strategy that the findings pointed to, Mr Wood added: “That doesn’t necessarily mean no longer investing in property. Indeed, our sales in January and February have been twice our average for 2020.
“It could, however, mean a plan to invest in a wider variety of property in different locations, such as those both within and away from city centre locations, more with two or three beds - something with a home office and or a garden. These are becoming increasingly popular in addition to traditional buy-to-let areas.
“The change to the way in which we all live our lives because of the pandemic means that a change of direction in their investment portfolio makes the most business sense to meet shifting demands. They could include investing in commuter areas as people who would previously have needed to be in a city centre every day look towards a mix of home and office working, for example.
“Dependable rental income and letability is something all investors should consider when buying so thinking about the type of tenant you hope to attract is more important than ever.”
Just over 40% of respondents said they had not changed their strategy as a result of the pandemic, while a quarter (27.8%) said they were unsure of their position.
One letting agent responding to the survey said: “All our landlords are keeping their properties albeit we may see an increase in properties bought in areas that are more rural but with good internet links as more people shift to working from home.”
Another stated: “Landlords who historically purchased in the city centre are now looking further out for better returns.”
On five-year price predictions, while 71.5% foresee a rise, 19.9% believed they thought they would stay the same with just 8.5% anticipating a decrease.
Asked about prices over the next two years, 37% predicted an increase. Another 37.9% believe they will stay static in that timeframe, with 25.1% expecting them to fall.
It is hoped that the long-term price optimism will continue to bring new buy-to-let investors to Scotland’s property market.
Ross MacDonald, Portolio’s co-founder and director of sales, added: “The signs remain positive that - beyond the discomfort that we will feel from furlough ending and the job losses that may follow - that the economy will adjust and stabilise. That’s clearly reflected in landlords’ outlook.
“The ongoing support of lenders is, of course, critical across the entire housing market. Throughout the pandemic they have stood by borrowers. Continuing to do so is an important part of the economic recovery that everyone is desperate to see.”