A buy to let mortgage lender says a third of landlords plan to purchase additional properties over the next 12 months, despite tax and red tape burdens on the sector.

But despite that glimmer of hope, there’s still overwhelming pessimism about the lettings industry.

The Landbay survey of some 2,000 landlords found the proportion holding a negative view of the wider UK economy had fallen slightly from 69% to 65%.

There’s also an increase in the proportion expressing negative sentiment about their own buy to let businesses, from 37% to 40%.

Of those responding, 17% intend to purchase one property in the next 12. Months, while 12% plan to purchase between two and three properties. A further 6% intend to purchase four or more properties, demonstrating continued investment appetite among a proportion of landlords.

At the same time, 56% said they did not intend to purchase further properties over the coming year, compared to 52% in the previous survey, while 10% remained undecided.

Selling intentions also highlighted the different approaches landlords are taking to managing their portfolios, with 43% saying they had no plans to sell properties over the next 12 months, while 39% expected to sell at least one property.

Landbay says the findings are not unusual given landlords are continuing to assess their existing portfolios and make decisions based on individual circumstances, rather than following a single approach to investment or disposal.

Rental income and yields continue to support portfolios

The survey also found landlords continue to report a range of gross rental yields, with 33% achieving between 4% and 5.9%, while 20% reported yields between 6% and 7.9%. 

A further 14% reported yields between 8% and 8.9%, with 9% achieving yields of 10% or above, demonstrating that a proportion of landlords continue to achieve higher returns despite ongoing costs and wider market pressures.

Rental income also remains an important consideration, with 83% of landlords planning to increase rents over the next 12 months, compared to more than 75% in the previous survey. 

The largest proportion (38%) intend to increase rents in line with inflation, while 20% plan increases between inflation and 7%. A further 10% expect to raise rents by less than inflation, with 14.5% planning increases of 7% or more.

Landbay states that the findings demonstrate how landlords are continuing to manage their rental income and property costs in a competitive rental market, while seeking to maintain the financial performance of their existing investments.

Remortgaging and product transfers remain central to borrowing plans

The survey results also highlighted the continued importance of refinancing, with 38% of landlords expecting to take a new product with their existing lender when their current mortgage deal ends, while a further 21% anticipate remortgaging to a different lender.

Just over a quarter remain undecided about their next move, highlighting that a significant number of landlords are yet to determine their future borrowing arrangements and would benefit from mortgage advice.

When asked which factors would most influence these decisions, mortgage interest rates were cited by 34% of respondents, closely followed by the total cost of borrowing at 33%, while product fees were the main consideration for 11%.

The survey also found a continued strong preference for fixed-rate mortgages, although the balance between different product terms appears to be changing.

Two- and three-year fixed rates were the most popular choice, selected by 46% of respondents, followed by five-year fixed rates at 41%. Meanwhile, 10% said they would choose a variable-rate or tracker mortgage, compared to 6% favouring trackers in the previous survey.