The majority of landlords are “cautiously optimistic” about their own portfolios and future investment in the private rented sector, according to a new study by Landbay.

The buy-to-let (BTL) lender suggested that landlords were fully aware of the challenges facing the sector but remain actively engaged in the market, focused on the opportunities available to them.

A survey conducted by Landbay at the end of December and start of January found that two in five landlords (40%) felt negative about the outlook for their own BTL businesses, a result the lender said reflected immediate sentiment following the Autumn Budget.

When asked whether the Budget would influence their plans over the next 12 months, however, there was an even 44% split between landlords on whether they would buy or sell as a result, with the remaining 12% saying it had not impacted their plans.

Sales and distribution director at Landbay, Rob Stanton, said: “The results of this new iteration of our survey show landlords are incredibly realistic about the current pressures in the sector, particularly around tax and regulation, but also that they are actively engaged with the market, and looking for ways to improve the performance of their portfolios.

“Landlords were not enamoured of the Budget – that is obvious – but they are taking steps to mitigate against measures which may increase their costs, and many plan to add to portfolios, shift ownership structure, and raise rents, in order to ensure they remain profitable.”

Stanton added that one of the key takeaways from the lender’s research was how many landlords are carrying higher-rate mortgages arranged when pricing was less favourable.

Landbay’s study found that more than a third of landlords said the rate of their most recent buy-to-let mortgage was above 5%, which the lender suggested reflected deals secured during the peak of the recent rate cycle.

At the same time, landlords were looking ahead over a long timeframe. Five-year fixed rates were the most popular choice when respondents were asked what they were likely to choose as a next remortgage, highlighting a preference for longer-term certainty.

“The good news here is that over the past six months in particular, pricing has shifted considerably, and advisers are likely to be able to secure some considerable savings for those borrowers coming up to remortgage,” Stanton continued.

“With product transfers increasing across the market, it is vital that advisers remain close to their landlord clients. Reviewing existing borrowing and understanding how pricing has changed can make a meaningful difference to monthly costs and future planning.”

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