A vast majority of landlords expect to see a significant increase in house prices over the next 12 months, reveals the latest survey from Mortgage Trust.
The survey shows confidence in the housing market has reached record levels with 90% of respondents expecting house prices to rise over the coming year.
Within that 90%, 53% expect an increase between 3% and 5%, while just over one tenth expect 6% or more
This market confidence is encouraging further property investment, with 25% of those surveyed indicating they are actively purchasing additional rental property.
Over the next 12 months, landlords expect to increase their portfolios by an average of 16%, an expansion of just over one property per landlord.
Nicola Severn, marketing manager at Mortgage Trust, says: Although many pundits were predicting stagnant house prices at the beginning of the year, it is clear that the demand and supply ratio in the housing market is continuing to push up prices.
Buy-to-let investors are acutely conscious of the current economic conditions, and it is no surprise that they are increasing their portfolios in order to take advantage of potential price increases.
The current appetite for portfolio growth is set not only against expected house price increases, but also a favourable outlook for rental returns.
Findings from the latest Royal Institution of Chartered Surveyors residential lettings survey from May 2006, revealed that tenant demand has pushed rent rises to their highest in almost five years.
Mortgage Trust found that 49% of landlords have rental returns of 6% or more of their portfolio value, and a further quarter of respondents are currently increasing their rents.
This reflects an upward pressure on rents and has no doubt contributed to the propensity of landlords to further invest.
The Houses in Multiple Occupancy government regulation has had little effect on landlords with the majority of respondents are confident that their properties do not require a licence.
However, 17% of the sample admitted they were unsure about the legislation and did not know if they would fall under the regulation.
One fifth of landlords who have already obtained HMO licences felt the process was timely and confusing.
Severn adds: The regulation of HMOs is likely to affect only a small and specialist sector of the buy-to-let market.
With only one month until the grace period for gaining a licence comes to an end, it is obvious that there is still a need for more communication and clarification to relieve landlords confusion.