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27 June 2006
ARLA Survey of Residential Landlords: June 2006 51k
- Property Can't Steal Away in the Night
Conflicting reports about the state of the housing market have had no effect on buy to let investors. This is shown by the second quarter's survey - conducted last month from among the 10,000 subscriber landlords on the ARLA Buy to Let website - published today, 27 June 2006.
Nearly two thirds of all landlords expect to acquire further investment property in the next twelve months and even if house prices fall, nine out of ten will not sell. Instead, the expected lifespan of a buy to let investment is 16.2 years while the average age of investors is 46.
"We believe that investor landlords do their research and know and understand the investment market in residential property to rent. They also feel secure in the knowledge that their investment cannot steal away in the night," said Adrian Turner, Chief Executive of ARLA, announcing the latest quarterly survey results.
Meanwhile, the ARLA Index remains stable. It stands at 102 for outright cash purchases and 99.8 for a geared investment.
ARLA surveys and the ARLA Review & Index are published quarterly in conjunction with the ARLA Panel of Mortgage Lenders: Birmingham Midshires, GMAC Residential Funding, Mortgage Express, NatWest, Paragon Mortgages and The Mortgage Business. They are the largest surveys of their kind and they question over 800 letting agents and landlords.
A high proportion of these investment landlords have been active in the buy to let market since 2000. They hold an average of five properties, although this polarises between the 53% who have only one or two and the 10% who have more than 10 properties. These investors have been landlords for an average of just under six years with 15 percent having more than ten years' experience in the market.
Virtually half of all respondents say that they have invested in buy to let properties to create a nest egg. 43% look for rental yield as well as capital appreciation but only 6% have invested solely for the income. A negligible number, just 2.7%, invest for short term capital gain.
Investor landlords say that their tenants stay for an average of 17 months, regardless of the length of the initially agreed term. Only one in eight, 8.5%, found that tenants stayed for between six and nine months, which is probably the average length of an initial tenancy agreement.
Despite government advertising aimed at every landlord in the private rented sector to warn them to license Houses in Multiple Occupation, the great majority, more than 80%, believe they neither own nor manage properties which would create an HMO that might be subject to mandatory licensing.
Full details of the ARLA Review and Index and the Quarterly Surveys are available on the ARLA website, www.arla.co.uk.
Editors Note: ARLA News Releases can be downloaded direct from the News and Press section of the ARLA website on the day of issue. Releases can also be sent direct by email on request.
Available to download in Adobe PDF format:
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