The proportion of landlords planning to purchase property has more than tripled since the end of last year with the combination of growing home equity, stable and resilient demand, as well as government initiatives such as the stamp duty holiday inducing significant incentives to invest. This is reflected in HMRC data, which revealed a 21.3 per cent increase in property transactions between August and September - close to 100,000 transactions.
At the end of 2019, research from Simply Business, an insurance provider that caters to over 250,000 landlords, revealed that 82 per cent of landlords did not plan to expand their portfolios, whilst just 3 per cent expected to acquire a single property. As of the implementation of the stamp duty holiday in 2020 however, this jumped significantly to 10 per cent of landlords actively pursuing new property purchases, whilst only 5 per cent have any intention of selling.
Mortgage approvals are at their highest level now since before the 2008 financial crisis, driven by factors such as historically low credit prices as well as the ballooning pool of home equity available for release in UK homes. According to analysis from Canada Life, using the latest Halifax quarterly regional house price index, housing equity available to homeowners has grown to reach almost £600 billion in Q3 2020, a £100 billion increase from Q2. The potential equity release value available is highest in the South East, standing at £123bn (£107,966 per household), closely followed by London, at £114bn (£148,909 per household).
Bolstered by fiscal policies designed to stabilise employment and elevate demand, landlords have been emboldened to pursue new opportunities which enable participation in the astounding capital appreciation the market is experiencing. Moreover, the 17.5 per cent annual house price growth predicted by quote service Reallymoving this year, will make it harder for first-time buyers to get onto the property ladder, hence increasing rental demand. As such the market is experiencing large surges in activity, with an all-time high reached in exchanges outside of London in the second week of October according to Knight Frank.
One in 10 (10%) landlords now plan to purchase properties and expand their portfolio, compared to just 3% at the end of last year, according to research by Simply Business, who provide insurance to over 250,000 landlords. At the end of last year, 82% of landlords claimed that they had no plans to acquire another property in 2020, while just 3% were intending to add more than a single property to their portfolio.